Zhenro Properties Group Ltd. expects to raise roughly HK$3.74 billion in net proceeds from an IPO of 1.00 billion shares at an indicative price range of HK$3.40 to HK$4.08 apiece.
The global offering, subject to reallocation, comprises 100.0 million shares to be issued under the Hong Kong offer and 900.0 million shares to be issued under an international offer. The latter comes with an overallotment option for underwriters to further purchase up to 15% of the number of shares initially available under the global offering.
Shares under the offer represent 25% of Zhenro's enlarged issued share capital. Cornerstone investor Hong Kong Bao Xin Asset Management Ltd. agreed to subscribe to shares worth HK$750.0 million, according to a filing.
Net proceeds — estimated on the basis of a HK$3.74 per-share offer price, which is the midpoint of the indicative price range — will be approximately 60% utilized as construction costs for the development of existing property projects or project phases. These include the Nanjing Zhenro Riverside Violet Mansion, Nanchang Zhenro Mansion and phase 1 of Wuhan Zhenro Mansion.
Roughly 30% of the proceeds will be allocated for the repayment of a major chunk of bank and other borrowings, while the rest of the proceeds will be used for general working capital purposes.
The public offer will run from Dec. 28 to Jan. 8, 2018. Zhenro expects to announce the results and final offer price Jan. 15, 2018, with dealings in the shares slated to commence on The Stock Exchange of Hong Kong Ltd. from 9 a.m. local time on Jan. 16, 2018.
CCB International Capital Ltd. is the sole sponsor for the offering, as well as its joint global coordinator alongside Guotai Junan Securities (Hong Kong) Ltd. The duo will jointly serve as book runners and lead managers along with Haitong International Securities Co. Ltd.
Zhenro is a China-focused diversified property developer, headquartered in Shanghai. As of Oct. 31, it has a portfolio of 81 projects covering approximately 11.5 million square meters in 17 cities. The company's investment properties were valued at about 7.79 billion yuan, as at June 30.
As of Dec. 27, US$1 was equivalent to 6.56 yuan.