China Development Bank Financial Leasing Co. is in talks to sell stock to China Three Gorges Corp. and China State Shipbuilding Corp. in its Hong Kong initial public offering, which could raise about $1 billion, according to people with knowledge of the matter.
CDB Leasing, a Shenzhen-based aircraft, infrastructure and ship lessor, plans to allocate about 70 percent of the share sale to cornerstone investors, the people said. State-owned power generator China Three Gorges has offered to commit as much as $400 million and will likely be the largest cornerstone investor, according to the people, who asked not to be identified because the information is private.
The offering will be the city’s second major listing from a leasing company this year after BOC Aviation Ltd.’s $1.1 billion share sale last month. First-time share sales in Hong Kong have raised $5.6 billion this year, less than half the $13.4 billion of deals priced during the same period in 2015, data compiled by Bloomberg show.
China State Shipbuilding is in talks to invest about $50 million in the CDB Leasing IPO, according to the people. Guangdong Hengjian Investment Holding Co., funded by the government of the southern Chinese province, is in discussions to purchase as much as $150 million of shares, the people said.
Cornerstone investors typically agree to hold on to their stock for six months in return for early and guaranteed allocation. CDB Leasing plans to start taking orders for the IPO on June 21, according to the people.
Details haven’t been finalized and could still change, the people said. Bank of America Corp., Citic CLSA Capital Markets Ltd. and Deutsche Bank AG are joint sponsors of the offering, according to a June 12 Hong Kong stock exchange filing.
A Hong Kong-based external spokeswoman for CDB Leasing declined to comment. Two calls to the communications department of China Three Gorges went unanswered, while a representative for China State Shipbuilding declined to comment. Guangdong Hengjian didn’t answer a call to its general line seeking comment.