China Tourism seeks $2.16 billion in Hong Kong's biggest listing so far in 2022 - term sheet

China Tourism seeks $2.16 billion in Hong Kong's biggest listing so far in 2022 - term sheet

China Tourism Group Duty-Free Corp aims to raise up to $2.16 billion through a new listing in Hong Kong, according to a term sheet reviewed by Reuters, in what will be the most significant share sale in the city far in 2022.

The term sheet said that shanghai-listed China Tourism is planning to sell 102.76 million shares priced between HK$143.50 and HK$165.50 ($18.30 and $21.10) each.

The offer has already been fully subscribed, according to two people with direct knowledge of the matter. The sources spoke anonymously because they were not authorised to discuss the issue with the media.

China Tourism, which has built the largest duty-free retail network in China, did not respond to a request for comment on the deal's launch or subscription rate.

The deal's launch comes as Hainan island, in China's south, where China Tourism has several prominent shopping outlets, remains under tight restrictions due to an outbreak of COVID-19.

The price range represents a 29.3% to 38.7% discount on the stock's 201.19 yuan closing price on Thursday in Shanghai.

Hong Kong share sales of Chinese-listed companies are typically offered at a discount to entice investors to buy the stock, but China Tourism's flagged value is higher than usual.

According to Reuters, the rate was chosen to help ensure the stock trades positively in the secondary market, one of the sources with direct knowledge.

China Tourism's Shanghai-listed shares have recovered most of their losses since lockdowns across Hainan began to be ordered last week. Its shares are down 8.3% year to date.

The term sheet said that China Tourism plans to set the final price next Thursday, and the Hong Kong stock will start trading on Aug. 25.

According to the term sheet, almost 40% of the deal's stock has been sold to cornerstone shareholders who will invest about $795 million.

Sanya, a holiday city on the southern end of Hainan island at the centre of the COVID outbreak, reported 1,690 symptomatic and 1,504 asymptomatic cases from Aug. 1 through Aug. 10.

If executed, the duty-free shop operator's deal would surpass Tianqi Lithium's $1.71 billion listing in June to become the most significant share sale in Hong Kong in 2022.

There has been $4.9 billion worth of initial public offerings and secondary share sales in the city this year compared to $34.7 billion at the same time last year, according to Dealogic data.It is the slowest year-to-date for new listings since 2009. - investing

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