Xinhua Finance aims for US$323m offer
Shanghai-based business news distributor Xinhua Finance Media (XFM) and some shareholders plan to raise as much US$323 million through a share sale on the Nasdaq stock exchange to repay debt and fund the company's expansion.
The firm is selling 23.08 million American depositary shares (ADS), of which 17.31 million are new shares, while the remaining 5.77 million are old, being sold by company chairman and chief executive Fredy Bush, New York-based investor Patriarch Partners Media Holdings and smaller shareholders, at US$12 to US$14 each, according to a regulatory filing in the United States.
Each ADS represents two common shares.
The offering represents 33.9 per cent of the company's enlarged share capital.
After the sale, XFM's parent, Tokyo-listed Xinhua Finance, will have its stake in the subsidiary diluted to 36.7 per cent, from 49.1 per cent. Patriarch Partners' stake in the company will decrease to 8 per cent from 19.6 per cent, while Ms Bush's stake will drop to 5.8 per cent from 9.2 per cent.
About US$50 million of the proceeds raised from the offering will be used to repay debt to Xinhua Finance, in which state-run Xinhua News Agency has a minority stake.
The debts were incurred when the subsidiary bought Xinhua Finance Advertising and the contractual control over Beijing Century Media Culture from its parent last year, as well as the advances its parent provided for the purchase of a 19 per cent stake in Upper Step Holdings and Accord Group Investments.
The remainder would be used for strategic acquisitions and working capital, the filing said.
JP Morgan and UBS are leading the transaction while ABN Amro, CIBC and WR Hambrecht are also helping in the sale.
The international roadshow was launched yesterday and will pitch to Hong Kong investors next Tuesday, according to sale documents obtained by fund managers.
Final pricing will be determined on March 8 after the 15-day worldwide roadshow is completed.
Xinhua Finance Media, which incorporated in November 2005 by acquiring several companies from its parent, reported net income of US$3.34 million on revenue of US$59 million last year.
The company said it did not plan to pay out any cash dividends on its ADS in the foreseeable future, preferring to focus on expanding the business.