Vinda International Holdings, a China-based manufacturer of sanitary paper products, plans to offer 300.57 million shares at HK$3.18-3.68 each in an initial public offering (IPO) in Hong Kong, a market source said.

The company is expected to raise up to HK$1.1 billion (US$140.7 million) from the IPO, which will be used mainly to acquire additional machinery for sanitary paper production, according to the preliminary prospectus.

The company recorded a net profit of HK$107 million last year, up 83 percent from 2005, it said, adding that it plans a dividend payout ratio of 25 percent after listing.

Trading of the shares will start on July 10, the source said.

Merrill Lynch is the sponsor.