Reuters reported that China Sany Heavy Industry Co Ltd and Inner Mongolia Yitai Coal Co announced Hong Kong initial public offerings that could raise more than USD 1 billion each as mainland firms increasingly tap Hong Kong for funds.

Sany Heavy said it would sell H-shares totaling up to 15% of its expanded capital, which would be worth up to about CNY 8.5 billion at its current market value. The company gave no fund raising target.

The Shanghai listed construction machinery maker, which earlier this year announced plans to invest USD 200 million in a manufacturing base in Brazil, said the funds would be used to expand production capacity and overseas operations, as well as to upgrade technology. It said the share sale received shareholder approval but still required the green light from regulators.

Inner Mongolia Yitai Coal Co said its planned Hong Kong initial public offering would fund the purchase of CNY 8.45 billion of coal assets from its parent company. It said in a statement that the issue of H shares would be worth at least 15 percent of its expanded capital.

A source close to the deal had said in January that the coal production and transport company aimed to raise about USD 1 billion in a Hong Kong IPO in the second or third quarter of this year.

Chinese companies are taking advantage of a buoyant Hong Kong market to sell shares, with banks particularly keen to raise funds in the city as they seek to replenish their capital after a lending spree.

(Sourced from Reuters)