By: Derek Lim

DJ China XLX Fertiliser Launches S$202M Singapore Public Offer

SINGAPORE (Dow Jones)–Urea and methanol producer China XLX Fertiliser Ltd. Tuesday launched a S$202 million Singapore initial public offering of 262.9 million shares priced at S$0.77 each.

The offer includes 200 million new shares and 62.9 million vendor shares held by third parties, according to a prospectus filed Monday with the Monetary Authority of Singapore.

Some 6 million shares will be sold in a public tranche while 256.9 million will be sold to institutional investors.

The offer closes on June 18 and the shares are expected to begin trading on the Singapore Exchange on June 20.

After expenses, the company expects to raise approximately S$145.8 million, which will be used to finance manufacturing facilities, a power generation plant, and for general working capital.

Business Highlights
– 6th largest coal-based producer or urea in the PRC (by production capacity)
– 4th lowest cost coal-based producer of urea in the PRC (by total cost)
– Since 1 January 2007, our annual production capacity for urea and methanol more than doubled to 680,000 tons and 100,000 tons respectively.

Price: S$0.77
Placement: 256,880,000
Public: 6,000,000
Date of Offer: 12th June 2007
Closing: 18th June 2007
Commence Trading: 20th June 2007
Underwriter: UOB KayHian & Stirling Coleman

Prospectus Link

I did a search for coal-based urea. Though I didn’t get a very detailed answer, but I believe that it is a type of fertilizer that is harness from coal and it is environmentally safe for the soil.

China is going big on environmental issues and I am almost certain that any IPO with the word China in it will attract a lot of interest. With 6 million shares to the public and a fairly high price of S$0.77 per share, chances of getting it via IPO is fairly high.

I have sold my Memtech shares and will be applying for 10 lots.