BAIC Motor (Beijing Auto) plans to raise around HK$11.03bn (US$1.42bn) through an IPO in Hong Kong.
Reuters, citing unnamed sources with knowledge of the deal, said the company plans to issue 1.24bn shares at $8.90 each, however, the price is not yet fixed and may change. Shares will begin trading on the Hong Kong Stock Exchange from 19 December.
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The company plans to use 10% of the proceeds to develop new vehicles, 15% to repay bank loans and 60% to expand an engine factory and vehicle production line.
UBS, HSBC, Deutsche Bank and Citic Securities have been hired as joint sponsors for the IPO. The company will pay $3.2m to these banks for their sponsor roles. Meanwhile, CLSA, Morgan Stanley and China Merchants Securities are acting as joint bookrunners. The banks will jointly earn US$14.2m from the deal in underwriting commissions.
