According to market papers on Monday, Chinese liquor producer ZJLD Group plans to raise up to HK$6.37 billion ($811.5 million) in an IPO in Hong Kong, the highest in the financial hub this year.
A total of 490.7 million shares are being offered by the business, which is supported by American private equity behemoth KKR & Co Inc (KKR.N). Each share will cost between $HK10.78 and $HK12.98. According to the documents, it would result in it raising $674 million to $811.5 million.
ZJLD would have a maximum market value of $5.4 billion. Shares are scheduled to begin trading on April 27 once the final price is decided on Thursday.
According to the documents, there is also a “greenshoe” option to sell an additional 73 million shares, which could bring in an additional $122 million.
Baijiu, a clear distilled liquor that is popular across China, is produced by ZJLD. According to ZJLD’s prospectus, baijiu is regarded as China’s national liquor and the drink that people drink the most globally.
In China, baijiu makes up 69.5% of the market for alcoholic drinks. According to its records, its market share in China is higher than that of wine in France and beer in the United States.
The IPO, the biggest in Hong Kong since Chinese lithium battery producer CALB Group Co (3931.HK) raised $1.3 billion in October, would reduce KKR’s 16.2% holding in the business to 13.8%.
Hong Kong has historically been a significant hub for Asian initial public offerings (IPOs), but as the world’s financial markets remain unstable and Chinese corporations awaited the implementation of new regulations controlling offshore listings, fresh share sales have decreased drastically.
According to Refinitiv statistics, just $508.3 million was generated in fresh share sales in Hong Kong during the first quarter of this year.
Dealmakers are optimistic that as markets stabilize and significant companies like Alibaba Group (9988.HK) and JD.com (9618.HK) plan several spin-off listings, the city’s IPO volumes will increase in the second half of 2023 and into next year.