Zoomlion’s share sale was supported

Zoomlion’s share sale was supported by four cornerstone investors Based in Changsha in central China, the company makes a variety of heavy machinery for the construction industry, including concrete machinery, cranes, and environmental and sanitation machinery. In the listing prospectus, Zoomlion noted that China accounted for approximately 42.6% of global sales of construction machinery in 2009, making it the largest market for the product ahead of North America and Europe.

Zoomlion sold 869.58 million new shares plus a 15% greenshoe option. If the latter is exercised in full, the total deal size will increase to $1.9 billion and exceed shipbuilder China Rongsheng Heavy Industries to become the third largest listing in Hong Kong this year. Rongsheng raised $1.8 billion ahead of its trading debut last month. However, since Zoomlion is already listed in the A-share market, its share sale doesn’t technically count as an IPO, meaning Rongsheng looks set to remain the third largest IPO after AIA and Agricultural Bank of China.

Like most other recent deals, Zoomlion’s share sale was supported by four cornerstone investors. However, with a combined purchase of $82 million worth of shares, their investment only accounted for 4.9% of the base offer, which is quite modest compared with 15%-25% in a typical Hong Kong IPO. The cornerstones were: Hillhouse Capital Management, an Asia-focused fund management firm; Keywise Capital Management, a Hong Kong-based fund management firm; SIIC Investment Company, the investment arm of government-backed Shanghai Industrial Investment; and investment firm Zhong Ke Bright Trinity Enterprises.