Baring-backed Yongda abandons Hong Kong IPO

The motor-vehicle company planned to sell 312.2 million shares at HK$7.60-10.80 apiece on May 13 and extended order-taking from institutional investors by five days to May 28, before finally pulling the plug.

One third of the shares were sold to two cornerstone investors - Baring Private Equity Asia and Middle East sovereign wealth fund Oman Investment Fund. The private equity firm has reportedly invested $96-120 million in the deal, while Oman committed to buy another $30 million worth of shares.

Yongda, which operates 66 sales outlets and has approval to open another 25, is the fourth Chinese auto dealer to try and raise funds in Hong Kong in the past two years. Apart from BMW, the company sells global brands including Audi, Jaguar, Land Rover, Cadillac, Toyota, Honda, Nissan, Volkswagen and Hyundai.

Yongda isn't the only victim of cooling investor appeitites for Asian IPOs. Nonferrous Mining Corp, the mining unit of state-owned China Nonferrous Metal Mining Group, also lowered the fundraising target for its Hong Kong IPO to $313 million from $500 million. The company also delayed its launch date in order to accommodate a longer road show, people familiar with the situation told The Wall Street Journal.

Hong Kong's IPO market has witnessed its quietest first half since 2009. Companies have together raised $1.4 billion through since the start of the year, compared with $7.3 billion for the same period in 2011, Bloomberg reported.

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• Topics
• Greater China
• Consumer
• China
• Baring Private Equity Asia
• automobiles
• IPO