M&G Chemicals bets on China growth with HK IPO

Italian plastics group M&G Chemicals plans to raise about $600 million in a Hong Kong IPO, set to be the biggest new listing by an overseas company in the city in two years.

M&G, the world's third-largest producer of the PET resin used for soft drink bottles and packaging, is offering 2.35 billion shares in an indicative range of HK$1.65-HK$1.95 per share, according to a term sheet of the deal seen by Reuters on Wednesday.

M&G Chemicals, which is part of Italy's Mossi Ghisolfi group, plans to use 50 percent of the proceeds to partially fund the construction of a plant in East China's Anhui Province.

Another 30 percent of the IPO funds will go toward the construction of a plant in Texas and 10 percent will be set aside to repay a bridge loan.

M&G will become the second Italian company to list in Hong Kong, following Italian fashion icon Prada SpA which raised $2.5 billion in June 2011.

The listing comes at a time when foreign company IPOs in Hong Kong have slowed after some activity two years back.

Asia Potash Group, from Laos, and Mongolian miner Altain Khuder are the two other foreign issuers looking to go public in Hong Kong next year, Thomson Reuters publication IFR has reported.

The company received commitments for about $100 million worth of shares in the initial public offering from three cornerstone investors - Danish industrial enzymes maker Novozymes, Spain's Cepsa Quimica and China Nuclear Engineering and Construction Corp.