Saturday, May 27, 2017
 
Columnist
Martin Hennecke

China firms eye giant Saudi IPO
 
21/04/2017
 
China is creating a consortium, including state-owned oil giants and banks and its sovereign wealth fund, to act as a cornerstone investor in the initial public offering of Saudi Aramco, which is likely to seek a listing in Hong Kong.

People with knowledge of the discussions told media that Saudi Aramco, a key oil exporter to China along with Russia's Rosneft, is due to list next year, with a potential US$100 billion (HK$780 billion) equity sale that is expected to be the world's largest to date.

Media reported earlier this month that Saudi Aramco's board would meet in Shanghai in May - its first meeting in China in seven years - as Chinese and Asian investors eye the share offering from the world's biggest oil exporter.

Saudi officials have said Chinese companies were interested in investing in the Aramco IPO as the mainland - the second biggest consumer of oil globally - seeks to secure crude supplies.

Various sources said China Investment Corp, the country's US$800 billion sovereign wealth fund, along with oil giants Sinopec and PetroChina, and the country's state-run banks were among the state-backed entities set to participate in the Chinese investment consortium.

Separately, China Everbright Greentech, a spinoff of Everbright International (0257) opens its retail book today.

The environmental protection service firm had sought a listing in June last year, but withdrew the application. Chief executive Qian Xiaodong explained that it wanted to wait to announce its annual results to provide a clearer picture for investors.

Now it is issuing 56 million shares in the retail tranche, accounting for 10 percent of the global offering. The offering price ranges between HK$5.18 and HK$5.90 apiece.

Minimum board lot size is set at 1,000 shares. Hence, minimum investment amount will be up to about HK$5,959.

The IPO expects to raise about HK$3.3 billion at most, with the company earmarking 80 percent of net proceeds to be spent on developing its mainland business.

Qian also expects to budget HK$8 billion for the capital expenditures in the coming two years, and the firm plans to explore opportunities in the central government's Belt and Road strategy.

Trading debut on the main board is scheduled for May 8.

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