Club Med owner scales back Hong Kong IPO plan by nearly half amid downbeat mood

  • Fosun Tourism Group is seeking to raise up to US$547 million in Hong Kong IPO, which is slated to begin trading on December 14
PUBLISHED : Thursday, 29 November, 2018, 8:04pm
UPDATED : Friday, 30 November, 2018, 8:10pm

Fosun Tourism Group, owner of the French holiday resort chain Club Med, has cut the size of its Hong Kong initial public offering by almost half amid a slumping market and a surge in new share offerings.

The company, the largest leisure tourism resorts group in the world by revenue, plans to raise as much as HK$4.28 billion (US$547 million) by pricing 214.2 million shares to be sold at a range between HK$15.6 to HK$20 per share, it said in a statement on Thursday.

Fosun Tourism initially aimed to raise up to US$1 billion through the listing, the Post reported in September.

“The size of our fundraising was set based on our business development needs and the current market and investor situation,” Qian Jiannong, chairman and chief executive Fosun Tourism, told a press briefing.

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The resort giant spun off from acquisitive Chinese conglomerate Fosun International joins a growing number of companies that have slashed the size of their IPOs in Hong Kong. The trend started in July when Chinese smartphone maker Xiaomi had to scale back its much-anticipated listing by more than half to US$4.8 billion.

Earlier this month Chinese parenting platform operator Babytree Group downsized the size of its listing by 70 per cent to US$281 million, down from the original US$1 billion target.

An escalating US-China trade war and a slowing economy in China have weighed negatively on investor confidence, triggering a tumble in the Hong Kong’s stock index at the same time a wave of new listings were seeking to raise capital.

Xiaomi’s value cut by almost half as smartphone maker prices IPO at the lower end of the price range

A total of HK$256 billion (US$33 billion) was raised through IPOs during the first 10 months in Hong Kong, a 187 per cent jump from the HK$89 billion in the same period last year. This puts the city on track to become the world’s top IPO destination this year.

However four out of the five biggest IPOs this year are now trading below their offer prices. Telecoms tower operator China Tower, which ranks as the world’s largest listing by funds raised this year, closed at HK$1.15 per share on Thursday, down 9 per cent from its offer price of HK$1.26.

The Hang Seng Index has slumped by 13 per cent since the beginning of the year.

Shares of Fosun Tourism will begin their trading debut on December 14, after the public offering closes on December 6.

Fosun’s Club Med unit says it has filed for a Hong Kong IPO, could raise up to US$1 billion