Western Mining Co Ltd, a leading Chinese mining firm, said on Thursday it had priced its Shanghai IPO shares at 13.48 yuan each to raise 6.2 billion yuan ($816 million) for mine expansion projects. The firm, China's second-largest lead miner and fourth-largest zinc miner, is selling 460 million A shares, or around 20 percent of its expanded share capital.
The offer, handled by UBS Securities, a unit of UBS, attracted 263.78 billion yuan ($34.71 billion) in orders. This is the first A-share initial public offering underwritten by the Swiss investment bank's joint venture in China. China is accelerating A-share IPO approvals to take advantage of the massive liquidity available for developing the domestic securities market.
Some analysts have said they expected fund-raising by Chinese companies via A-share IPOs would hit 400 billion yuan this year, up from 165 billion yuan in 2006, as Beijing encourages more Hong Kong-listed Chinese firms to sell shares at home.
Top China coal miner Shenhua Energy said this week it may raise up to $6.3 billion in Shanghai in what could be the world's second-largest share sale this year, to fund acquisitions at home or abroad.
More large IPOs are in the pipeline, including an impending $6 billion deal by top Asian oil producer PetroChina and an expected $5.5 billion offer by China Construction Bank Analysts expect Western Mining to stage a robust debut on the Shanghai stock exchange later this month, partly because of strong international prices of metals such as lead.
Lead prices on the London Metal Exchange touched a record high of $2,890 a tonne on Wednesday. "Western Mining will see a stable growth over the long term," said Heng Kun, chief analyst at Essence Securities in Beijing.
The firm's listed assets mainly include lead and zinc mining and smelting assets - part of them were acquired in recent years. Mining assets also include the Yulong copper deposit in Tibet, China's largest proven copper resource, and the Bayannaoer copper mine in Inner Mongolia, which is already operating.