CHINA: Harbin public offering is over-allocated

The Chinese brewing group, Harbin Brewery Group Ltd., appears to have had a very positive market response to its initial public offering on the Hong Kong stock exchange. The company stated in a legal notice that the book-runner for its IPO, Cazenove Asia Ltd., has over-allocated some 36.3m shares in the placement.

The additional shares have been borrowed under a securities lending agreement and will be settled at a later date either by exercising the over-allotment option or through purchases on the secondary market, the company said.

As a result of the over-allocation of stock, the number of shares sold to professional and institutional investors stood at 254.1m, up from the initial number of 217.8m. The initial offer price was HK$1.56 per share. The over-allocation was made after the IPO met with strong demand, particularly from institutional investors.

The company's shares officially commenced trading on the Hong Kong stock exchange last Thursday. Harbin plans to use the share issue to finance debt reduction and future acquisitions and for general working capital.

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