The controlling shareholder of Want Want Holdings, the largest rice cracker manufacturer in Asia, will cash in as much as HK$8.5 billion by selling part of his stake in a Hong Kong public share offering next month, sources said.
Taiwanese self-made tycoon Tsai Eng-meng and his family, who own 95 per cent of Want Want, planned to use most of the proceeds to repay a bridging loan taken out to privatise the company from the Singapore stock exchange in September last year, a source said.
The Singapore exchange's thin trading volume and weaker secondary market for fund-raising deals prompted Want Want to withdraw its listing and switch to Hong Kong, market watchers said.
Want Want, of which Japan's Iwatsuka Confectionary owns 5 per cent, is seeking to raise about HK$1.5 billion from the Hong Kong listing by issuing new shares to fund mainland expansion.
About 65 per cent of the sale proceeds will be budgeted as capital expenditure mainly for brewery products, 25 per cent for expanding the distribution channel and the remainder will go to general capital.
'Despite the market volatility, Want Want hopes to sell shares with a valuation of not less than 35 times its estimated earnings for last year,' a source said.
The deal's arranger Goldman Sachs would meet fund managers today while two other sponsors, BNP Paribas and UBS, had talked to investors individually yesterday, sources said.