Rongsheng appoints firms for $1.5bn IPO

China shipbuilder Jiangsu Rongsheng Heavy Industries has appointed Morgan Stanley and JPMorgan to finalise plans for its long-awaited initial public share offering in Hong Kong, aiming to raise up to $1.5 billion (Dh5.51) in the fourth quarter.

This is Rongsheng's latest bid to go public after it failed to raise more than $2bn from a planned IPO in Hong Kong in 2008, mainly as a result of the global financial crisis.

Rongsheng's early main shareholders include an Asia investment arm of Goldman Sachs, top US hedge fund DE Shaw and New Horizon, a China fund founded by the son of Chinese Premier Wen Jiabao.

The three investors sold off their stakes in Rongsheng for a profit early this year, said the sources familiar with the situation.

Rongsheng's revived IPO plan comes at a challenging time again. Smaller domestic rival, New Century Shipbuilding, slashed its Singapore IPO in half last week to raise up to $560 million from the originally planned $1.24bn due to market conditions. Given uncertainty in the global shipbuilding business environment as well as growing concerns over a huge flow of fund-raising events in Hong Kong, investment bankers suggest the potential size for Rongsheng could be $1bn to $1.5bn.

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