Milestone backs China restaurant chain IPO
Milestone Capital Partners has agreed to become a cornerstone investor in Chinese restaurant chain Xiao Nan Guo’s Hong Kong IPO. The company is looking to sell 341.25 million shares at HK$1.50 to raise HK$511.5 million ($65.9 million). A Milestone subsidiary will buy $22 million worth of shares, which would give it a 7.7% stake in the listed company.
Bank of America Merrill Lynch is the sole global coordinator for the offering while also sharing sponsorship responsibilities with Standard Chartered.
Hong Kong market sentiment has been poor recently, leading to a number of IPOs being scrapped. Graff Diamonds, Formula One, Hyundai Oilbank and China Yongda Automobile Services are the highest profile cases in a string of failures. As of June 1, 46 companies have withdrawn or postponed offerings worth a total of $7.7 billion, according to Thomson Reuters.
The emergence of private equity and other alternative players as cornerstone investors comes amidst attractive public market valuations and less interest from traditional backers.
Blackrock, Capital Group and Och-Ziff Capital Management Group are among those supporting IHH Global's IPO, PAG took a chunk of Haitong Securities' offering, and Baring Private Equity Asia agreed to be a cornerstone investor in China Yongda Automobile Services, although the listing was subsequently pulled.
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