FRANSHION Properties China Ltd, the real-estate unit of Sinochem Corp, may raise as much as HK$3.31 billion (US$424 million) in an initial public offering.
According to an e-mail sent to international institutions, Franshion will sell 1.41 billion shares, or a 30-percent stake, at HK$1.85 to HK$2.35 apiece. The company may expand the sale 15 percent to HK$3.8 billion to cover surplus demand.
Property companies and real estate investment trusts have raised US$5.6 billion in Hong Kong share sales this year, according to data compiled by Bloomberg News.
Chinese developers are raising capital to expand land reserves as government measures to cool a property bubble threaten to force smaller rivals out of business.
Franshion has earmarked 390 million shares, or 27.6 percent of the offering, for four corporate investors, including New World China Land Ltd, the mainland unit of Hong Kong tycoon's Cheng Yu-tung's property company; hedge fund manager Stark Investments; and the Government of Singapore Investment Corp.