China’s biggest pork company WH Group succeeds in Hong Kong IPO
WH Group offered a total of 256,740,000 shares or 10% of its global offering on the main board of HKEx at a price of HK$6.20 (US$0.80) per share, according to the company’s 4 August communiqué.
WH Group estimates total net proceeds of as much as HK$15.3bn (US$1.9bn) from its global offering, destined to partially repay the three-year tranche of HK$19.3bn (US$2.5bn) of a syndicated term loan that matures on 30 August 2016.
The company first attempted a float on the HKEx in April, with a global offering of 3.6 billion shares and 182 million (15% of its global offering) shares in the Hong Kong public offering. An initial share price was set at between HK$8.00 (US$1.03) and HK$11.25 (US$1.45), but the company later announced the postponement of the IPO due to unexpected lacklustre subscription and subsequently slashed the per-share offering price both for international and Hong Kong shares.
The company claimed that "no offer shares have been allocated to applicants who are directors or existing shareholders of the company and/or any of its subsidiaries, or connected persons", but in its global offering prospectus issued in April it said high-level executives including chairman Wan Long would be rewarded.
Feng Yonghui, an analyst with research organisation China’s Live Pigs Warning, said: "Although the price at HK$6.20 (US$0.80) was significantly lower than its initial offering price, the second attempt has been well-timed. China has now pulled through the market slump and overcapacity has been reduced with overall prices in the pork industry increasing by about 30%."
