CITIC Dameng to Kick Off Hong Kong IPO Soon

Nov. 9 -- CITIC Dameng Holdings Ltd., China’s largest manganese producer, plans to issue 750 million shares at an indicative price range HK$2.1 to HK$2.75 each in its Hong Kong initial public offering (IPO), the company said Sunday.

CITIC Dameng said 90% of its shares will be sold through an international placing, while the remaining 10% will be available to local investors.

The company is expected to set the share price on Nov. 11 and list on the Hong Kong Stock Exchange on Nov. 18 under the stock code “1091”. The company could raise between HK$1.58 billion and HK$2.06 billion through the IPO, CITIC Dameng said in a statement.

State-owned CITIC Resources Holdings Ltd. (CITIC Resources, 1205.HK) previously said that it wanted to spin off CITIC Dameng, its manganese mining and processing unit, this summer.

"The proposed spin-off will create CITIC Dameng Holdings as a pure-play investment opportunity that will enable investors to better understand both the company and CITIC Dameng Holdings as separate entities," CITIC Resources said in a statement in June.

According to Hong Kong-based Economic Journal, its international placing was oversubscribed by 300%-400%.

Gaoling Fund, an Asia-focused fund managed by Hillhouse, has agreed to subscribe to up to $80 million worth of shares, accounting for up to 9% of CITCI Dameng’s enlarged share capital, CITIC Resources said in a separate statement last week.

CITIC Resources and Guangxi Dameng Manganese Industry Co. Ltd are the largest shareholders of CITIC Dameng, controlling 52.4% and 34.5% of the company, respectively. The Hong Kong IPO will dilute those stakes to 49.13% and 25.88%, respectively.

CITIC Dameng controls 97 million tons of manganese reserves and covers almost all sectors of the manganese industrial chain.