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China-based hospitality group seeks up to $200M US IPO

GreenTree Hospitality Group Ltd., a hotel operator based in Shanghai, is looking to raise as much as $200.0 million from an initial public offering of its class A ordinary shares in the U.S.

The shares are expected to trade on the New York Stock Exchange under the GHG ticker.

Following the completion of the IPO, the group will have outstanding capital of 56,589,300 class A ordinary shares and 34,762,909 class B ordinary shares, all of which will be owned by parent company GreenTree Inns Hotel Management Group Inc., according to the company's prospectus.

As of 2017-end, the group operated 190,807 rooms across 2,289 economy to mid-scale hotels in China, with a further 23,157 rooms in 306 hotels that are either contracted for or under development. More than half the portfolio is in China's greater Yangtze River Delta region, with 12.8% of the properties spread across the Beijing/Tianjin/Hebei region.

GreenTree plans to invest the net proceeds from the IPO to expand its hotel chain, improve existing properties, fund potential acquisitions of domestic and overseas hotel operators, as well as for working capital and general corporate purposes.

The group is headed by Chairman and CEO Alex Xu, who founded and is chairman of California residential developer American Pacific Homes Inc.

Morgan Stanley & Co. International plc, Merrill Lynch Pierce Fenner & Smith Inc. and UBS Securities LLC are acting as underwriters for the offering.