The deal had been on the cards for a while but the stock rose over 7% on Monday after the Chinese government said it would increases access to financing for solar panel companies. The Hang Seng also posted two straight trading session gains, encouraging sole bookrunner Goldman Sachs to pull the trigger.
CIC put 1.2bn shares up for sale, about one third of its stake in the polysilicon manufacturer. The deal launched after market close with a price range of HK$1.86 to HK$1.96, a 6.7% to 11.4% discount. It eventually priced at the wider end of the range.
Ahead of the books opening at 6.30pm, the lead already knew where over 50% of the deal was going having lined up a number of anchor investors. The deal closed with around 40 to 50 lines in the books with a good showing from long only accounts and hedge funds, said a banker.
GCL-Poly was one of two block deals to launch on Monday night along with Shenzhou International Group. These were the first follow ons of more than $100m in Hong Kong since May 20 when Shui On Land raised $205m, according to Dealogic.
Market conditions are unlikely to improve in the short terms so issuers will have to move quickly if they want to price deals.
“I think this is how the street will pan out for the next few months. When you get an opportunity you just have to go for it,” said a banker close to the deal. “Accounts will start going away for the summer but if you can get a couple of investors to help you get across the line you should be able to get a deal away.”
GCL-Poly was trading down 11.9% at HK$1.85 at 12pm Hong Kong time on June 18.