Hong Kong rare wine merchant to raise US$80m on alternative board
HK rare wine merchant aims to raise HK$80m on GEM to fund expansion and acquisitions
A Hong Kong fine wine merchant is looking to test investor palates for local small- to medium-cap companies in a public placement on the city's Growth Enterprise Market (GEM).
Madison Wine is seeking to raise up to HK$80 million by placing 100 million shares in a bid to strengthen its product portfolio and buy local rivals, according to its filing to the Hong Kong stock exchange.
It is the second local wine merchant to go public, with the deal pointing to a pickup in new listings on the GEM at a time when initial public offerings on the main board are in the doldrums, with big players holding back on concerns they might attract only tepid investor response.
"We have not seen our business affected by the stock market rout for the time being, given that our predominant focus is on selling rare wines, for which the supply is scarce and the demand is more resilient," Madison (China) Limited director Samuel Lin said.
Uncertainty and volatility have put a dampener on large cap offerings in the city since the mainland stock market slump in mid-June, but that has not deterred a flurry of smaller companies, spanning everything from diary operators to wine sellers, from floating their shares.
Madison Wine said it intended to set aside half of the proceeds for product portfolio expansion and diversification, 30 per cent for acquisition of one or more local rivals, and use the rest for marketing and financing of routine operations.