Bank of China closes world's sixth largest IPO
Hong Kong: Ignoring tumbling equity markets and signals from the Beijing regime of more lending curbs, investors have allowed Bank of China (BOC) to close the world's sixth largest IPO close to top, at HK$2.95. The pricing is just off the top end of the HK$2.50 to HK$3 price range, and has led to a total deal size of $9.73 billion.

Market observers said that the below the top-end pricing was believed to have been made in recognition of the sharp correction in global markets over the past week.

The deal could still end up surpassing Telstra and AT&T Wireless to become the fourth largest IPO globally if the 15 per cent greenshoe is exercised in full, allowing it to raise $11.19bn in total.

BOC's offering is already the largest IPO by a Chinese company, edging ahead of China Construction Bank's $9.2bn share sale in October last year. However, BOC is widely expected to concede that spot when Industrial & Commercial Bank of China decides to brave the market, potentially in the third quarter of this year. BOC's IPO, which comprised 10.5% of its enlarged share capital or 25.6 billion new H shares, was jointly arranged by Bank of China International, Goldman Sachs and UBS.

The final price values BOC at 2.18 times its estimated 2006 book value, which compares with 2.43 times for China Construction Bank, according to people familiar with the offering.
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Eurotunnel in deal to reduce debt
With a restructuring deal with its biggest creditors likely, Eurotunnel has cleared a significant obstacle in its efforts to reduce its overall $6.2bn debt and stave off bankruptcy. Creditors currently hold $4bn of the debt.

The Channel Tunnel operator is still struggling to cope with the huge costs of digging the tunnel, which went way over budget. Eurotunnel bondholders and shareholders still need to approve the plan before going ahead.

It also needs to finalise details of the refinancing of the debt and the company has been in talks with the investment banks Goldman Sachs and Macquarie.

In a statement, Eurotunnel said it was continuing negotiations with other parties and pushed back its annual meeting by two weeks to July 12 in the hope of having a deal ready to present to shareholders by then. Eurotunnel gave no detail of the agreement with the senior creditors, represented by a group called the Ad Hoc Committee.

The private shareholder Nicolas Miquet, who led the investor revolt in 2004 that ousted Eurotunnel's British-led management team, welcomed the deal but said he awaited flesh on the bones of the announcement.

Eurotunnel needs to get a deal done before next year when repayment is due on an undisclosed amount of debt. The business is expected to run out of cash in early 2007.
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British export orders at 10-year high, says CBI survey
London: A Confederation of British Industry (CBI) survey says that British firms' export orders from the resurgent eurozone are at their strongest for 10 years, while business investment picked up firmly in the first quarter, boosting hopes that UK industry is on the road to recovery.

The CBI's industrial trends survey of 705 firms showed that in May the percentage of exporters reporting orders above normal increased to the highest level since February 1996, driven by demand for capital goods such as industrial engines and aerospace equipment.

"The outlook for UK manufacturing is more encouraging than it has been for some time on the back of the strong performance of eurozone economies and continued growth in the US," said Ian McCafferty, chief economic adviser of the CBI.

A healthy increase of 1.7% in business investment in the first three months of 2006, reported by the Office for National Statistics, encouraged the positive tone. Manufacturing investment made a significant contribution, jumping 7%. The CBI reported that there was little sign of an increasing appetite for British-made consumer goods, casting doubt over the strength of consumer spending. "Until this happens the recovery will remain fragile," McCafferty said.
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