SWF-backed ZhengTong Auto earns $470 million in IPO, trades at slight premium
ZhengTong Auto Services Holdings, backed by institutions such as sovereign wealth funds the China Investment Corp., Government of Singapore Investment Corp. (GIC) and Singapore’s Temasek Holdings, has raised $470 million from its IPO, and saw its share prices rise on Friday from HK$7.30 ($.94) to $7.62 ($.98) on its trading-day debut on the HKSE.
The company, which sells luxury cars from its 22 dealership locations in Mainland China, anticipated share prices to sell within the range of $6.80-8.60 ($.87-1.11) apiece, according to Reuters. Further reports suggest that the capital will be used to expand its dealerships by approximately 45 locations over the next two years.
A representative at Zhengtong Auto could not confirm the amount invested by the SWFs, though global reports suggest they were not for sizable stakes in the firm. In addition to the SWFs, the Soros Fund Management Hong Kong, a hedge fund backed by George Soros, has committed approximately $50 million in Zhengtong Auto.
Zhentong Auto opened in 1999 via the launch of a Nissan dealership. Since that time, the company has expanded to include representation in several first-tier cities in Northern China, and has this year opened a BMW outlet in Beijing and obtained dealership rights for Porsche.
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