Shares in CSSC (Hong Kong) Shipping have fallen back after the company carried out an HKD 1.97bn ($252m) IPO in Hong Kong on Monday.
Last month, the shipowning arm of state-owned shipbuilder China State Shipbuilding Corp (CSSC) said it was aiming to raise HKD 2.2bn by selling stock at between HKD 1.34 and HKD 1.42 each.
It listed at the lower price on Monday and closed at HKD 1.24.
On Tuesday, there was a turnover of 5m shares worth HKD 5.91m, but the stock closed down 8% at HKD 1.14.
Its market capitalisation is now HKD 6.99bn.
Proceeds will expand fleet
The company said HKD 1.18bn of the proceeds from the IPO will be used to strengthen the capital base of the group’s ship leasing business, which it believes "will enhance the competitiveness of its ship leasing services and vessel portfolio."
About HKD 592.4m will be used as the capital base for the group’s sale-and-leaseback projects in respect of "marine clean energy equipment", including LNG and LPG carriers.
And HKD 197.5m is earmarked as working capital and for general corporate purposes.
China Reinsurance has subscribed for 416.65m shares, Cosco Shipping for 175.5m, Wison Engineering for 174.6m and First Automobile for 146.2m, representing 59.5% of the offer shares. CSSC will remain the largest shareholder with 75%.
CSSC Shipping owns 100 vessels worth $5.6bn.
In 2018, revenue was up 58% to HKD 2.1bn, with profit rising 17% to HKD 707m.
