ESR Cayman seeks $11b in revived HK IPO

Business | Bloomberg and Avery Chen 22 Oct 2019

ESR Cayman, backed by private equity firm Warburg Pincus, relaunched its Hong Kong initial public offering today to raise as much as HK$11.4 billion in what could be the SAR's second-biggest deal this year.

The logistics warehouse developer is offering 653.7 million shares priced between HK$16.20 to HK$17.40 apiece. In June, ESR postponed its IPO attempt of raising as much as HK$9.76 billion, citing unfavorable market conditions.

The minimum investment is HK$3,515.07, given a board lot of 200 shares. ESR aims to price the offering on October 25 and begin trading on November 1. Deutsche Bank and CLSA are co-sponsors on the offering.

The comeback of ESR would further propel Hong Kong's IPO market momentum despite social unrest. Data shows Hong Kong's first-time share sales have slumped by 43 percent from the same period last year to HK$143.52 billion.

In other IPO action, JS Global Lifestyle, the parent company of home-use soy milk maker brand Joyoung, launches its IPO today to raise up to HK$3.62 billion and will be the first new stock available for subscription through an IPO app.

The company is issuing 499.8 million shares at an indicative price range between HK$5.55 and HK$7.25, with the minimum investment of HK$3,661.53 per board lot of 500 shares. It set to debut on the main board on October 31. Credit Suisse (Hong Kong), Morgan Stanley Asia and ICBC International Capital are joint sponsors of the flotation.

Retail investors may submit their white application form online or in the IPO app, an ICBC spokesman said.

Meanwhile, shares of IWS Group (8441) surged 65.63 percent to HK$0.53 in the Bright Smart gray market before its debut last night.

Separately, Julia Leung Fung-yee, deputy chief executive of the Securities and Futures Commission, said they saw that a notable portion of small IPOs has had relatively concentrated shareholdings in recent years.

Hong Kong clinched top positions in IPO fundraising and market capitalization last year, but it lags other major markets in liquidity, which shows there is room to raise the turnover in Hong Kong, she said.

She added the SFC is working with Hong Kong Exchanges and Clearing (0388) to study the possible causes behind the relatively lower trading volumes to enhance overall liquidity in local markets.

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