Chinese radiotherapy firm Hygeia attracts nine cornerstone investors in HK$2.22 billion IPO plan

The international tranche looks set to get oversubscribed based on interest shown by institutional investors

The stock may be price in a range of HK$17 to HK$18.50 each, a person familiar with the deal says

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A surgeon looking at a monitor in an operating room. Hygeia joins a host of medical services providers making a beeline to list in Hong Kong. Photo: Shutterstock

Published: 6:26pm, 16 Jun 2020Updated: 6:25pm, 16 Jun 2020

Hygeia Healthcare, China’s largest oncology health care group backed by US private equity firm Warburg Pincus, has obtained commitment from nine cornerstone investors for about half the size of its initial public offering in Hong Kong.

The nine, including Hillhouse Capital, China Southern Asset Management, Tiger Pacific Capital, OrbiMed Capital, and Lake Bleu Capital, have offered to subscribe for US$143 million worth of stock, according to its listing prospectus published on Tuesday.

The Shanghai-based provider of radiotherapy services could raise as much as HK$2.22 billion (US$286.5 million) by selling 120 million shares at an Indicative price range of HK$17 to HK$18.50 each, according to a person familiar with the deal.

Based on interest shown by other institutional investors, the international placement tranche is expected to be oversubscribed by several times, the person said. Morgan Stanley and Haitong International Securities are the joint sponsors of the deal.

The Hong Kong public offering, which will account for 10 per cent of the total shares on offer, or 12 million shares, will close on Friday, when the final pricing will be determined. The stock is expected to start trading on June 29, based on its indicative timeline.

There is an over-allocation option granted to the underwriters to issue an additional 18 million shares to fill up excess demand. Hygeia could raise up to US$329 million if the option is exercised at the top-end of the price range.

Warburg Pincus will reduce its effective stake to 13.79 per cent from 17.24 per cent after the stock offering, according to the IPO prospectus. The private equity firm has recently pushed some of its investments to the exchange, including Chinese logistics firm ESR Cayman, and owns stakes in Car Inc, among others.