Jul 06, 2018 (China Knowledge) - China's real estate transaction service provider, E-House (China) Enterprise Holdings Co., Ltd. has locked in four cornerstone investors including Alibaba ahead of its Hong Kong initial public offering (IPO), which is expected to raise up to HKD 5.7 billion.
According to the terms of the deal, E-House is offering 322.836 million new shares at HKD 14.38 to HKD 17.68 per share, raising HKD 4.64 billion to HKD 5.71 billion (USD 592 million to USD 727 million).
Four cornerstone investors - Alibaba, Overseas Chinese Town Asia Holdings Ltd, Henderson and City Development Land - subscribed for USD 50 million, USD 156 million, USD 38 million and USD 30 million respectively, totaling the subscription amount to USD 274 million.
The Shanghai-based company launches its roadshow today and is expected to set its price on July 13 and be listed on July 20.
The prospectus disclosed that the funds raised by E-House are intended to be used for the further development of big data, first-hand housing and second-hand housing agencies. The company aims to expand to more than 50 third and fourth tier cities in order to increase the coverage of first-hand housing agency services.
E-House was established in 2000. It was listed on the New York Stock Exchange (NYSE) from 2007 -2016, after which it was delisted from the NYSE in a venture-backed deal that valued the company at USD 1.2 billion. According to the prospectus, as of now, the chairman of E-House, Zhou Xin's current stake in the company is 25.62%, which makes him the single largest shareholder and controlling shareholder of the enterprise. The remaining shares are held by 26 China's top 100 real estate enterprises and several institutions, with China Evergrande, Country Garden and China Vanke holding 15 % respectively.
The joint sponsors of the IPO are Credit Suisse Group AG and China International Capital Corp (CICC).
The company currently has a strategic cooperation agreement with 42 real estate developers. In 2017, the company's revenue expanded 15.9% from a year earlier to RMB 4.633 billion, as compared to 2016's RMB 4 billion revenue. Its 2017's net profit at RMB 352 million was lower than 2016's RMB 487 million.
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