Chinese tea company Tenfu Holdings is seeking to raise up to USD182 million from an initial public offering, ahead of its scheduled September 26 listing on the Hong Kong Stock Exchange.

 

The company, which kicked off the roadshow and the bookbuilding process on September 12, is offering 208.62 million new shares, or 17 percent of their enlarged capital, and has set the indicative price range at HKD4.80 to HKD6.80 per share, according to the term sheet. There is a 15 percent greenshoe, which if exercised in full, could increase the deal size to up to about USD209 million.

 

It plans to use the 40 percent of the proceeds to expand its sales network while 25 percent will be used to acquire store premises for the operation of self-owned retail stores. The rest of the IPO proceeds will be used to maintain and promote brands and enhance consumer awareness, expand production capacity, and for working capital and other general corporate purposes and improvement of capital structure 


 

Ninety percent of the transaction is offered to institutional investors, while the rest is set for Hong Kong retail investors, subject to the clawback mechanism.  The company has secured about USD54.3 million worth of cornerstone investments from US private equity firm General Atlantic, which bought around 73 million shares at HKD5.8 per share or at the mid-point of the offer range. 

 

There is a 12-month lock-up on shareholding of cornerstone investor, while the company and major pre-IPO investors have six-month lock up, plus an additional 6-month lock up on the controlling shareholders. 


 

Bookbuilding will run until the September 20^, when the stock will be priced. Books will be opened to the public from September 14 to 19. Credit Suisse, CICC, and Polaris were joint global coordinators, bookrunners, and sponsors to the deal.