Profounders participates in Tibetan water producer’s IPO
China-focused Profounders Private Equity acted as a cornerstone investor in Tibet 5100 Water Resources Holdings’ $177 million IPO in Hong Kong. The firm’s Profounders I fund agreed to subscribe to a portion of shares worth $30 million, leaving it with around 16% of the total offering and approximately 3% of Tibet 5100’s total issued share capital.
The company overcame poor market sentiment - several other IPOs have been cancelled in the last week - to price its offering at HK$3, just below the mid-point of its offering range. In total, it sold 459.29 million shares, or 18.4% of its enlarged share capital, at what translates into a 2011 price-to-earnings ratio of 17.2.
CCB International, CITIC Securities, ICBC International, JPMorgan and Oriental Patron coordinated the offering. Fubon Life Insurance joined Profounders as a cornerstone investor, also committing $30 million.
Tibet 5100 is the first Tibetan company to list in Hong Kong. According to Euromonitor, it is the largest producer of premium bottled mineral water in China by sales, with a 28.5% market share. The company's share of the overall bottled mineral water market was about 2.2% last year.
Most of Tibet 5100's water is sold to corporate clients including railway operators, airlines, banks and hotels through long-term contracts. The company has been the designated supplier of bottled water to National People's Congress meetings since 2007. It was selected as the official supplier for the ceremony marking the 60th anniversary of the founding of the People's Republic of China in 2009.
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