CIFI and Tsui Wah IPO in Hong Kong

Both firms intend to raise a combined US$365 million.

Property developer CIFI Holdings (Group) based in Shanghai and Tsui Wah, a Hong Kong-style restaurant operator, have launched their initial public offerings in Hong Kong. CIFI looks to raise US$267 million while Tsui Wah’s goal is US$98 million.

CIFI is offering 1.255 billion new shares or 21.75% of the company’s enlarged share capital at HK$1.33 to HK$1.65 per share, with a greenshoe option to issue an additional 15% of the IPO shares. About 90% is expected to make up the international offering and the rest is for the Hong Kong public offering.

The IPO was opened for bookbuilding to institutional investors from November 12 and for Hong Kong public offering from November 13.
About 80% of the proceeds will be used for the acquisition of new products and for land development in China, 10% will be for repayment of bank loans including a facility agreement with Standard Chartered Bank and 10% will be for working capital purposes.

Tsui Wah is offering 43.2 million new shares or 25% of its enlarged share capital at a range between HK$1.89 and HK$2.27 per share base offering, with an over-allotment to issue an additional 15% of the IPO shares. Some 90% is for the international offering and the rest is allocated for the Hong Kong public offering, according to a term sheet.

China-based private equity fund Capital Today and Prax Capital will each subscribe to US$10 million worth of shares as cornerstone investors. There is a 12-month lock-up for Tsui Wah’s controlling and founding shareholders and CEO Anthony Lock Kwok-on, and the cornerstone investors.

Majority of the proceeds will be used for new restaurants’ opening in China and Hong Kong as well as a delivery centre and catering service, new central kitchens in Shanghai and Southern China including Hong Kong.