* IPO priced at HK$20.60/share, top of marketing
* Proceeds to help pay outstanding loans, expand two
* Stock to debut on June 13
(Adds HK IPO activity, WuXi IPO demand, comments)
By Julie Zhu and Elzio Barreto
HONG KONG, June 6 WuXi Biologics (Cayman) Inc
priced its Hong Kong IPO at the top of expectations on Tuesday,
raising $511 million in the largest new listing in the Asian
financial hub in 2017, as investors jostled for a piece of the
The Chinese contract drug research and development company
priced the 193 million shares on offer at HK$20.60
each, sources with direct knowledge of the deal said, the top of
its marketing range of HK$18.60 to HK$20.60 per share. The price
would value the deal at HK$3.98 billion ($511 million).
The deal will provide a much needed boost to IPO activity in
Hong Kong, which has fallen by almost 50 percent from the same
period in 2016 to $2.76 billion, the slowest start of a year
The IPO was more than 30 times subscribed, underscoring
investors' appetite for a sector with a "rarity appeal", and for
a company whose revenue jumped 77 percent in 2016 from the
previous year. Profit more than tripled last year as it expanded
the business and launched new projects.
"The reason this deal is so popular is because we don't have
other similar biotech companies listed in Hong Kong and WuXi
Biologics itself has been performing quite well in recent years,
which in turn has made investors more comfortable," one of the
The sources declined to be named because details of the
initial public offering were not yet public. WuXi Biologics did
not reply to a Reuters request for comment.
The shares will debut on the Hong Kong stock exchange on
WuXi Biologics, which does work for pharmaceutical and
biotechnology firms, plans to use about 45 percent of the IPO
proceeds to pay all its outstanding loans and debt and another
45 percent to expand its facilities in Shanghai and in nearby
Wuxi in Eastern China, the company said in the prospectus.
The remaining 10 percent would be used for working capital.
Bank of America Merrill Lynch, China Merchants Securities
and Morgan Stanley acted as joint sponsors and joint bookrunners
of the IPO, according to the prospectus.
The banks stand to jointly earn about $17.9 million in fees,
equivalent to a 2.5 percent underwriting commission and a 1
percent incentive fee, according to the prospectus.
WuXi Biologics parent, WuXi Pharmatech, was among several
Chinese companies that delisted from U.S. exchanges in 2015
seeking better valuations closer to their home market. The
company's $3.6 billion take-private deal was among the biggest
at the time.
(Reporting by Julie Zhu; Writing by Elzio Barreto; Editing by