Temasek interested in Sinopharm HK IPO

Amy Or
Dow Jones Newswires

Sinopharm Group Co. (1099.HK), which is seeking to raise US$1.12 billion in a Hong Kong initial public offering, has attracted more than US$28 billion worth of institutional orders even before the retail subscription begins, a person familiar with the situation said Wednesday.

The person said Singapore state-owned investment company Temasek Holdings Pte. Ltd. and Prince Walid bin Talal of Saudi Arabia have both placed orders of over US$100 million each. Tycoon Li Ka-shing and Sun Hung Kai Properties Ltd. non-executive director Walter Kwok have each placed orders of US$50 million, the person said.

Unlike cornerstone investors, who are guaranteed an allocation of shares, other institutional investors usually place large orders in a hotly sought-after IPO to increase their chances of getting the shares.

Nine cornerstone investors have already been guaranteed a combined US$195 million worth of shares. They include Bank of China Group Investment Ltd., CCB International Asset Management Ltd., China Life Insurance Co. and Government of Singapore Investment Corp.

Sinopharm is selling 545.7 million shares, or 25% of its enlarged share capital, in an indicative range of HK$12.25-HK$16.00 each.

Institutional bookbuilding for the IPO started Friday; retail investors will be able to apply for shares Thursday. The institutional tranche accounts for 90% of the offering and the retail tranche 10%.

The company aims to list on the Hong Kong stock exchange Sept. 23.

Sinopharm, China’s largest pharmaceutical products distributor by sales with a 10% market share, plans to use the proceeds from the IPO to expand its distribution coverage and retail network, acquire pharmaceutical products, and upgrade its logistics and information-technology systems.

China International Capital Corp., Morgan Stanley and UBS AG are joint bookrunners on the deal.

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