HONG KONG -- China's largest mini-car and helicopter maker, AviChina Industry & Technology Co Ltd, raised $248 million from an IPO after it was priced at the top of an earlier stated range, a banking source said on Monday.
The stock listing, one of the largest on the Hong Kong market this year, makes the company the first offspring of China's military conglomerates to sell shares to the public.
The deal drew strong demand from retail investors, who subscribed for more than 150 times the shares on offer.
AviChina's initial public offering was priced at HK$1.21 per share, the source said. The indicative range had been set at HK$0.95-HK$1.21.
Trading in AviChina shares is set to begin on Hong Kong's main board on October 30 under the stock code.
The company, the civil unit of Chinese defence conglomerate Aviation Industry Corp of China II (AVIC II), is the biggest mini-car maker in the country with a 41 percent market share.
It is also the only domestic mass producer of helicopters and regional jets in China.
The company plans to use proceeds from the IPO to expand its production capacity for cars, and develop its helicopter and regional jet businesses.
AviChina's IPO got a shot in the arm when European aerospace consortium EADS said it would buy five percent of the Chinese firm. EADS, the owner of commercial aircraft maker Airbus and Eurocopter, will pay about HK$276.48 million for its stake based on AviChina's final offer price.
Beijing-based AviChina sold 1.599 billion shares, or 35 percent of its enlarged share capital, for the IPO sponsored by BOC International and ING Bank.
The retail portion of the deal will be increased to 50 percent from 10 percent because of the oversubscription. The institutional tranche was 13.5 times covered, the source said.
Based on the offer price, AviChina sold its IPO shares at 13 times forecast 2003 earnings on a fully-diluted basis.
Shares in Denway Motors Ltd., Honda Motor Co.'s joint venture partner in China, are trading at about 15 times forecast 2003 earnings.
Brilliance China Automotive Holdings Ltd., China's largest minivan maker, has a forward P/E multiple of 13.1 times.
AviChina expects to post a net profit of at least $54.3 million this year, which would be a 13.4 percent increase from 2002.
The company has total assets of about 10.9 billion yuan and more than 30,000 employees.