Jinzhou, Liaoning province-based Chinese special chemicals firm Tianhe Chemicals Group Ltd. has raised US$654 million in an Hong Kong IPO priced at HK$1.80 apiece, at the lower-middle range of its original US$600 million to US$800 million target.
In March 2012, Morgan Stanley Private Equity Asia (MSPEA) invested US$300 million in Tianhe by subscribing convertible preferred shares of the company in a pre-IPO deal. As part of the deal, MSPEA’s chief investment officer Homer Sun joined Tianhe’s board.
According to Tianhe’s prospectus, MSPEA holds 9.35% of an entity that owns Tianhe before the IPO, assuming full-conversion of its convertible shares.
MSPEA has the option of selling up to 30% of its total number of shares during the IPO, but it is unclear if or how many shares MSPEA has sold.
Another pre-IPO investor, Asian alternative investment manager PAG, also bought US$35.3 million worth of convertible bonds in Tianhe in 2012.
Founded in 1992, Tianhe is China’s largest producer of lubricant oil additives and a producer of specialty fluorochemicals.