Tianhe tests investor reaction in HK

Tianhe Chemicals Group Ltd, the largest lubricant additives producer in China, began its initial public offering on Monday in Hong Kong, where it aims to raise as much as HK$6.34 billion ($818 million).

The Liaoning-based company will offer 2.8 billion shares at HK$1.75 to HK$2.25 each, its IPO document shows. About 27.48 percent of the shares are existing shares held by management, documents from the stock exchange of Hong Kong show.

About HK$1.54 billion, or 39.4 percent of the net proceeds assuming an offer price of HK$2 per share, will be used to repay a loan backed by Driven Global, a unit controlled by the Wei family, the founder and operator of Tianhe Chemicals.