Samsonite hopes to raise HK$11.75b from local IPO | South China Morning Post
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Samsonite hopes to raise HK$11.75b from local IPO

PUBLISHED : Tuesday, 31 May, 2011, 12:00am
UPDATED : Tuesday, 31 May, 2011, 12:00am
 

Luggage maker Samsonite International is poised to become the latest overseas company to list in Hong Kong, hoping to raise HK$11.75 billion in an initial public offering.

The US-based firm held an investor presentation yesterday ahead of its expected June 16 listing and, according to a pre-listing document posted on the Hong Kong stock exchange, Asia was the most profitable region for Samsonite last year.

Samsonite's net sales in Asia rose 45.1 per cent last year from 2009, constituting a third of its total sales last year.

China, India and South Korea were among the top five markets in Asia last year for Samsonite, which started life in 1910 as a trunk manufacturer in the US state of Colorado.

The retail operation of Samsonite, majority owned by London-based private equity firm CVC Capital partners following a US$1.7 billion acquisition in 2007, suffered in the financial crisis in 2008. It made a net loss of US$1.42 billion for the year to December 31 2008, blaming the economic downturn for discouraging travelling.

In the pre-listing document, its subsidiary Samsonite Stores Company in 2009 filed a voluntary petition under Chapter 11, the key business reorganisation chapter of the US bankruptcy code, so it could sell some underperforming retail leases.

After appointing a new executive chairman, Tim Parker, known as the 'Prince of Darkness' by labour unions because of his track record of laying off workers, Samsonite closed 68 retail stores in 2009 and last year.

The Royal Bank of Scotland, Samsonite's lender, also had about 30 per cent stake in the company. It introduced measures to cut costs and boost profits, including switching from suppliers in China to cheaper ones in Vietnam, Thailand, India and Bangladesh. For last year, the company made a net profit of US$366.8 million, down 69.7 per cent from 2009's US$1.21 billion. As of April 2011, loans and borrowings amounted to US$267.74 million.

The offering has been priced at HK$13.50 to HK$17.50 per share. The company is selling 671.24 million shares with most coming from CVC Partners. More than 80 per cent of the net proceeds will be used to pay debt.

Packing for the long haul

1910

Jesse Shwayder gambles entire fortune of US$3,500 to found the Shwayder Trunk Manufacturing Company in Denver, Colorado. Firm?s first cases named ?Samson? after the biblical character.

1920s

The company resorts to making licence plates, card tables and sand boxes to keep the business afloat in the Great Depression.

1955

Company launches first luggage to eliminate wooden box construction.

1960

Firm is valued at US$25 million.

1986

?Oyster? case launched which reportedly becomes fastest selling suitcase of all time.

2001

Denver factory, which once employed 4,000, closes.

2005

Headquarters moves to Massachusetts after a change of ownership. Marcello Bottoli, former chief executive of Louis Vuitton, brought in as president. He leaves in 2009.

2007

CVC Capital Partners takes over Samsonite for US$1.7 billion.

2009

Samsonite?s retail business files for bankruptcy.

2011

Plans announced to list on the Hong Kong stock exchange.

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