Orient Securities Hong Kong Offer Seeks Up to $1.2 Billion

Orient Securities Co., the Shanghai-based brokerage, and existing owners are seeking as much as $1.2 billion in a first-time share sale in Hong Kong.

The company and its investors are offering a combined 957 million shares at HK$7.85 to HK$9.35 apiece, according to terms of the deal obtained by Bloomberg. Ten cornerstone investors have agreed to buy stock in the offering, totaling about $474 million at the midpoint of the marketed range, the terms show.

Orient Securities will be the first Hong Kong listing by a Chinese brokerage this year, adding to the $5.6 billion of first-time share sales in the city, according to data compiled by Bloomberg. The company’s shares have fallen 28 percent in Shanghai trading this year, dragged down by delays in planned rules to streamline the domestic initial public offering process that had earlier boosted brokerage stocks. 

“This offering would be a benchmark for brokerage listings this year, as more will follow if it turns out to be successful,” Liao Chenkai, a Shanghai-based analyst at Capital Securities Corp., said by phone Monday. “China’s equity markets, which have been rather quiet, are not showing any sign of significant improvement. Listing in Hong Kong is a better choice for Orient Securities to fulfill their capital needs, as well as to promote their brand outside the country.”

Bocom International Holdings Co. has agreed to buy $99 million of shares in the Orient Securities offering as a cornerstone investor, the terms show. China Eastern Airlines Corp. and Shanghai Electric Group Co. are each committing $30 million. 

Cornerstone investors typically agree to hold on to their stock for six months in return for early and guaranteed allocation. Citigroup Inc., Goldman Sachs Group Inc. and Nomura Holdings Inc. are joint sponsors of the offering, according to a June 3 pre-listing filing to the Hong Kong stock exchange.

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