KKR-backed Rundong Auto launches $138 HK IPO

The offering consists of 268.62 million shares in an indicative range of HK$3.58 to HK$3.98.

The IPO is to be priced on August 5, with the trading of shares to commence on the Hong Kong stock exchange on August 12. According to a prospectus, the company plans to use 30% percent of the proceeds to pay down bank loans, 20% for acquisitions and 19% percent to set up eight stores for BMW and MINI vehicles in Jiangsu and Shandong provinces in Eastern China and also in Shanghai.

Set up in 1998, Rundong has 51 dealerships, with 36 stores in Jiangsu and in affluent coastal regions such as Shanghai and Shandong. Most of its stores focus on luxury brands such as BMW and Jaguar, and sports cars like Ferrari and Maserati, in addition to a number of other mid to high-end brands.

KKR committed $100 million over four separate rounds between December 2010 and November 2011 and owns a 26% stake in the company.

The company saw profits jump more than threefold to RMB100.2 million ($16.22 million) in the three months ended in March from RMB29.2 million in the same period in 2013. Sales meanwhile grew 62.5% over the same period to RMB3.9 billion.

Bank of America Merrill Lynch and Morgan Stanley have been selected as sponsors and joint global coordinators of the IPO, while CCB International and Haitong International will act as joint bookrunners.

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• Topics
• Exits
• Greater China
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• IPO
• Consumer
• automobiles
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