The offering won't result in new funds for the company but would give Vale increased visibility in China. The nation is Vale's biggest market, accounting for 36% of the company's revenue. Half of Vale's revenue comes from Asia. Vale is the world's biggest producer of iron ore, an ingredient in steel that is in high demand amid strong economic growth in China, India and other emerging countries.
Vale declined comment Thursday, pending completion of formal regulatory proceedings.
Observers had worried that Vale wouldn't receive permission from Hong Kong regulators before December, which could have delayed a listing until next year. That could have risked sluggish share performance, given signs that Hong Kong's surging market for new stocks is weakening.
Bluestar Adisseo Nutrition Group Ltd. this week scrapped plans to raise as much as $1.56 billion in an initial public offering, indicating that Hong Kong's appetite for new shares might be sated after a busy year. The maker of animal nutrition products cited market volatility.
Sixty-one companies have raised $45.5 billion so far this year, up from 58 firms raising $24.3 billion in all of last year.
Vale, whose shares already are listed in São Paulo, Paris and in New York, would be the first company to issue Hong Kong depository receipts after the regulatory framework for the securities was established two years ago. The use of what are known as HDRs will allow Vale to be traded in Hong Kong even though its Brazilian regulator restricts the company from maintaining a share register overseas. The listing would mean almost round-the-clock trading in Vale shares.
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