Shanghai-focused property developer SPG Land Holdings Ltd. began marketing a Hong Kong initial public offering to raise up to HK$1.23 billion (US$157 million).

The company, which is wholly owned by Australia's Starwaly Properties Group, is selling 250 million shares, or 25 percent of its enlarged share capital, at between HK$4.28 and HK$4.90 apiece, joining a spree of companies readying Hong Kong IPOs.

The proposed price range values SPG at a 30 to 38 percent discount to its net asset value estimated by underwriters.

SPG Land has six developed or developing projects in Shanghai and one in Huangshan, with an aggregate site area of about 3.0 million square metres and a total planned gross floor area of about 2.42 million square metres, the company said.

SPG Land plans to use 60 percent of its proceeds for land acquisition, 15 percent for existing project financing, 15 percent for repayment of debts, and the remainder for working capital.

The company, which focuses on low-density residential projects, expects to distribute at least 30 percent of its profit as dividend, its preliminary prospectus said.

It forecasts 2006 net profit will leap by at least 37.3 percent to 360 million yuan (US$45.37 million).

SPG Land expects its final pricing will be fixed on Oct. 3, with trading in the shares set to start on Oct. 10.

The IPO is being sponsored by DBS which is also joint bookrunner with Macquarie Bank.

IPO hopefuls are emboldened by the strong response generated by China Merchants Bank, which raised US$2.4 billion in a share sale that it priced at the top of its range after attracting massive investor demand.

Source:佚名