Tenwow opens pitch for US$200m share shale

Tenwow International, a Shanghai-based maker of packaged food and beverage products, started its premarketing campaign yesterday in a bid to raise about US$200 million through a Hong Kong float next month, rekindling hopes of a revival in initial public offerings this year.

The company, established in 1999, plans to sell 25 per cent of its enlarged share capital and use the bulk of the fresh capital to expand its production capacity in Chengdu.

Two people involved in the deal said investors were likely to look favourably on Tenwow because its self-branded products, which include candied fruits and nuts as well as bottled tea drinks, had relatively high gross margins.

In a bid to secure the launch deal, at least three private-equity firms - Carlyle, Milestone Partners and Orchid Asia - have pledged to commit a combined US$92.2 million as cornerstone investors, representing almost half of the entire share sale, according to a document seen by the South China Morning Post.

Part of the IPO proceeds will be used to finance distribution networks and expansion into new regions such as China's northeast and southwest, the two people said. After a week of premarketing this week, the company is expected to begin a one-week global roadshow next Tuesday.

It will take orders from retail investors from next Thursday to September 10, with final pricing to be set on September 11 and trading to start on September 19.