HONG KONG (XFN-ASIA) - China Molybdenum Co Ltd plans to issue 1.0836 bln shares at 5.0-6.4 hkd per share in an initial public offering (IPO) in Hong Kong, according to a market source.
Of the total shares to be offered, 90 pct will be allocated to international and institutional investors, while the remaining 10 pct will be offered to retail investors, according to the company's preliminary prospectus.
The company will sell a total of 1.6 bln usd worth of shares to nine corporate investors in its upcoming IPO, including (nyse: LFC - news - people ), Citic Pacific Ltd, (nyse: C - news - people ), New World Development chairman Cheng Yu Tung, (other-otc: BKEAF.PK - news - people ) chairman David Li Kwok-po, Henderson Land Development chairman Lee Shau-kee, the Government of Singapore Investment Corp Pte Ltd, (other-otc: CHEUY.PK - news - people ) (Holdings) Ltd and its chairman Li Ka-shing, according to the prospectus.
Cheung Kong and its chairman, Li, will each subscribe to shares worth 10 mln usd, while the seven other corporate investors will each acquire shares worth 20 mln usd, the company said.
The company said it intends to use 20 pct of the IPO proceeds to expand its molybdenum production capabilities, 20 pct on the development of its own tungsten production, 40 pct for the acquisition of mines and mining rights in relation to mines with identified mining resources, 10 pct to repay bank loan and the remainder for working capital.
The company added that it plans capital expenditure of 729 mln yuan for 2007. It also expects net profit of not less than 950 mln yuan this year, down 37.3 pct from 1.52 bln yuan in 2006.
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