HONG KONG (XFN-ASIA) - Dah Chong Hong Holdings (DCH) (1828.HK) -- a unit of CITIC Pacific which distributes vehicles, food commodities and edible oil -- plans to issue 781.2 mln shares at 4.55-5.88 hkd per share in an initial public offering (IPO) in Hong Kong, according to a market source.
Retail subscription will begin on Oct 4 with trading of shares scheduled to start on Oct 17.
DCH is expected to raise up to 4.59 bln hkd, the proceeds of which will be used to finance the expansion of the company's businesses, which include motor vehicles, the trading of food and consumer products, as well as logistics.
According to the preliminary prospectus, 90 pct of the total shares offered will be allotted to institutional investors through an international placement, while the remaining 10 pct will be offered to retail investors.
Several cornerstone investors will subscribe to a total of 105 mln usd worth of shares in DCH, it said.
Henderson Land Development chairman Lee Shau Kee and New World Development chairman Cheng Yu tong will each buy 30 mln usd worth of shares, while Cheung Kong (Holdings) and the Li Ka Shing Foundation Ltd will each subscribe to 15 mln usd worth of shares.
Japanese-based Otsuka Pharmaceutical Co Ltd has also agreed to buy 15 mln usd worth of DCH shares.
DCH has over 40 years of experience in the sales, distribution and servicing of motor vehicles. It was granted distributorships for 11 brands of motor vehicles in Hong Kong, including Acura, Audi, Bentley, Honda, Isuzu, and Nissan. It also sold 17 vehicle brands in China.
The company has forecast its net profit to be not less than 415.6 mln hkd this year, up 28.4 pct from 323.7 mln hkd a year earlier. It plans a dividend payout ratio of not less than 30 pct after the listing.
(1 usd = 7.8 hkd)
roby.lau@xfn.com
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