HONG KONG: Chinese sportswear manufacturer Topsports International Holdings Ltd is on course to raise $1 billion with its shares expected to price at HK$8.50 in an Hong Kong initial public offering, people with knowledge of the matter said..
The final pricing guidance given to investors is toward the lower end of the HK$8.30 to HK$10.10 (US$1.06 to US$1.29) range disclosed ahead of the deal.
Topsports’ US$1bil raising comes with the ability to exercise a so-called overallotment option, or greenshoe, which could allow the company to raise up to US$1.2bil.
Topsports had initially aimed to raise up to US$1.2bil before the over-allotment was put in place, previous term sheets showed.
Topsports declined to comment. The people with knowledge of the matter declined to comment as they were not authorised to speak with media.
With the US$1bil raised, the term sheet showed Topsports would have a market capitalisation of about US$6.6bil.
Topsports has previously said it would use 45% of the capital raised to repay debt to parent Belle International Holdings Ltd, nearly 27% to repay short-term bank loans and 9.7% to invest in technology for the business.
The deal is a further test of investment sentiment in Hong Kong which has been with besieged with ongoing protests that have turned increasingly violent over the past four months.
Hong Kong’s Hang Seng Index has lost 5.09% since the protests began in mid-June, Refinitiv data showed. The index is still 0.28% higher in 2019 than the same period last year.
Topsports is the largest sportswear retailer in China in terms of retail sales value, with a 15.9% market share in 2018, the company said in its IPO prospectus, citing consultant Frost & Sullivan. It distributes and is a retail partner with global sportswear makers Nike Inc and Adidas AG.
Its parent, Belle International, was privatised by Hillhouse Capital Group and CDH Investments in July 2017 in a deal worth US$6.8bil. — Reuters