Qing­dao Haier eyes $464mn from share sale

Gulf Times Business - - BUSINESS -

Chi­nese home ap­pli­ances maker Qing­dao Haier is look­ing to raise up to €400mn ($464mn) in the first so-called D-share sale in Frank­furt by a Chi­nese com­pany.

A Haier listing on the in­fant China Europe In­ter­na­tional Ex­change (CEINEX) would kick off the D-share project – D is for Deutsch­land – which aims to at­tract Euro­pean in­vest­ment in Chi­nese com­pa­nies.

Haier, al­ready listed in Shang­hai, has set a price range of be­tween €1 and €1.5 per share, it said in a fil­ing yes­ter­day morn­ing.

That rep­re­sents a dis­count of be­tween 20% and 46% to the com­pany’s Shang­hai clos­ing price of 14.95 yuan on Thurs­day.

The com­pany plans to sell 265mn shares, ac­cord­ing to the fil­ing, putting the deal size at €265mn to €400mn.

To­tal pro­ceeds could po­ten­tially reach €457mn if Haier fully ex­er­cises a 15% “green­shoe”, or over-al­lot­ment, op­tion.

The deep dis­count to Haier’s Chi­nese shares was to en­sure the first- of-its-kind deal goes well and at­tracts Euro­pean in­vestors, a source in­volved in the deal said.

“You don’t want to end up with egg on your face,” the per­son said.

CEINEX was set up with the bless­ing of Bei­jing and Ber­lin in 2015 and is mostly owned by Shang­hai Stock Ex­change (SSE) and Deutsche Bo­erse.

The es­tab­lish­ment of D-shares marks the lat­est in a se­ries of grad­ual moves by China to in­crease for­eign en­gage­ment with its com­pa­nies, al­beit of­ten at a dis­tance.

Chi­nese bro­ker­age Hu­atai Se­cu­ri­ties Co last month said it plans to list in Lon­don, po­ten­tially be­com­ing the first Chi­nese com­pany to sell shares un­der the long-awaited Shang­haiLon­don Stock Con­nect.

D-shares also join a long list of off­shore Chi­nese forms of eq­uity in­clud­ing H-shares and red-chips in Hong Kong, S-chips in Sin­ga­pore and Nshares in New York.

Qing­dao Haier is China’s top house­hold ap­pli­ances maker and in 2016 ac­quired Gen­eral Elec­tric Co’s ap­pli­ance busi­ness for $5.4bn.

Haier will open books for the share sale on Mon­day and close them on Wed­nes­day. Its D-shares will start trad­ing on Oc­to­ber 24, ac­cord­ing to the fil­ing. It said it in­tends to use the pro­ceeds to fund its ac­qui­si­tion of Ital­ian home ap­pli­ance maker Candy SpA and to pro­mote the Haier brand and the com­pany’s in­ter­na­tional growth with a fo­cus on Europe.

Haier se­cured three cor­ner­stones, Silk Road Fund, Camry In­vest­ment and Rechi Pre­ci­sion Co Ltd, who to­gether com­mit­ted to buy up to €162.5mn worth of shares.

Deutsche Bank is the sole global co­or­di­na­tor for the listing.

It’s also among the joint bookrun­ners with CICC, JP­Mor­gan and UBS.

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