* Listing priced at $20.50 per GDR
* Company to raise at least $1.5 billion
* Market debut slated for June 17
* Biggest orders placed by hedge funds -source (Adds financial details)
LONDON, June 14 (Reuters) - China’s Huatai Securities has priced its London stock market listing at the bottom of its indicated price range in a deal that will help it to raise at least $1.5 billion.
Huatai, one of China’s largest brokerages, is expected to make its London market debut on June 17, becoming the first company to trade via the long-awaited London-Shanghai stock connect project.
Its listing on the London Stock Exchange will coincide with Britain and China holding the next round of their Economic and Financial Dialogue (EFD), with Chinese Vice Premier Hu Chunhua leading a Chinese delegation to London on Monday.
Huatai sold 75 million global depositary receipts (GDRs) at $20.50 each, representing 9.1% of its outstanding share capital, it said on Friday.
The company will also make available an additional 7.5 million GDRs through an overallotment, or greenshoe, option that could boost the deal value to $1.7 billion. That would represent 82.5 million GDRs in total, or 10% of the group’s capital.
Huatai, which has a range of businesses including brokerage, wealth management and investment banking operations, had targeted a price range of $20 to $24.50 per GDR.
Chairman Zhou Yi said the deal “opens a gateway for international investors to share in the rapid development of China’s financial services market”.
Based in Nanjing, capital of China’s eastern Jiangsu province, Huatai has driven a fourfold increase in revenue through a series of mergers and acquisitions between 2012 and 2018.
Huatai is valued at about $21 billion through its Shanghai and Hong Kong listings, with the likes of BlackRock and Vanguard among its top investors in Asia.
A source close to the GDR sale said that the biggest orders for the London listing were placed by hedge funds, with other investors more cautious.
The listing, which was initially planned for December, has been delayed by uncertainty over how China’s government would treat any currency conversion back into yuan, sources said.
On May 27 China’s forex regulator published cross-border capital management rules on depository receipts, paving the way for Huatai’s London listing.
Other Chinese companies are expected to pursue similar moves, but several banking sources cautioned that it could take time to win over investors.
“This is a deal where investors had done the due diligence already back in December, so there was not a whole lot of market education needed,” said a source close to the deal.
JPMorgan, Huatai Financial Holdings and Morgan Stanley are leading the GDR sale as joint global co-ordinators and joint bookrunners, with Credit Suisse and HSBC also among the joint bookrunners.
Huatai says it ranks as China’s fourth-biggest securities company in terms of net profit and wants to use the proceeds from the GDR sale to ramp up its presence overseas after rapid growth in domestic revenue and wealth management customers in recent years. (Reporting by Pamela Barbaglia Additional reporting by Abhinav Ramnarayan Editing by David Goodman and Jan Harvey)
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