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KKR investee China Modern Dairy sees flat opening in HK

  • Maya Ando
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Kohlberg Kravis Roberts investee China Modern Daily, one of the largest local dairy farm companies in China, has debuted on the Hong Kong Stock Exchange in an IPO targeted to raise HK$3.5 billion ($448 million). The company opened trading at HK$2.80 ($0.36), slightly lower than its set IPO price of HK$2.89 ($0.37).

KKR made a series of investments in China Modern Dairy, previously Ma Anshan Modern Farming Co., culminating in June 2009. The company and selling shareholders initially sold 1.2 billion shares at the offer price of HK$2.89 per share. Advanced Dairy, a controlling shareholder owned by KKR, aimed to sell 228 million shares, equivalent to approximately HK$841.3 million ($108 million). The joint bookrunners arranged an over-allotment option under which they can require some of the selling shareholders to sell an additional 180 million shares at HK$2.89 each, according to a statement.

The company’s five cornerstone investors, including related dairy company Mengniu, Government of Singapore Investment Corp. (GIC), COFCO-controlled Ceroilfood Finance, Keywise Capital Management and Dong Yin Development, subscribed a combined HK$1.01 billion ($129.4 million), according to the South China Morning Post. Citigroup Global Markets Asia, the Hong Kong branch of UBS AG, KKR Capital Markets LLC and Deutsche Bank AG, Hong Kong Branch were the financial advisors on the listing, with Freshfields Bruckhaus Deringer as legal advisor.

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