Lighting products supplier NVC Lighting Holding said it was confident that its HK$2 billion initial public offering would go ahead this month and not suffer the same fate as several IPOs that were aborted this week as a result of weakening demand for new shares.
Four new share offerings have been withdrawn so far this week in Asia, excluding Japan, according to data provider Dealogic.
But NVC, which is located in Huizhou in Guangdong province, said its offering had so far received a good response from investors. 'A lot of investors like what we do,' said chairman Wu Changjiang.
NVC is selling 728 million shares at an indicative price range of between HK$2.03 and HK$2.90 each. It has a target listing date on the Hong Kong exchange of May 20.
The company will be under pressure to raise at least US$120 million in gross proceeds under an agreement with private equity investors Goldman Sachs, which is an underwriter of the deal; and SAIF Venture Capital Investment Growth fund. The latter is a Sino-foreign joint-venture private equity vehicle owned by the Tianjin municipal government, US-based technology company Cisco Systems and Japan's investment firm Softbank Corp.
According to its prospectus, NVC received capital from the private equity funds in 2006 and in 2008. If the company does not float its shares by August 1 next year, it will have to repay the outstanding debt with accrued interest.
'We took capital from private equity funds because NVC was growing so fast,' said Wu. 'We had some difficulties in expanding because until then we had been using our own funds.'
