[HONG KONG] China bottled water giant Nongfu Spring is seeking to raise as much as HK$8.35 billion (S$1.48 billion) in what could be the world's second biggest initial public offering (IPO) by a food and beverage company this year.
The Hangzhou-based firm is offering 388.2 million shares at HK$19.50 to HK$21.50 each in its Hong Kong share sale, according to a prospectus on the Hong Kong stock exchange website on Tuesday.
The offering attracted five cornerstone investors who will purchase a combined US$320 million of the offering, based on the top end of the range. Fidelity International will commit US$100 million, while Coatue Management will buy US$80 million. Singapore's sovereign wealth fund GIC will chip in US$70 million. China Structural Reform Fund and Cct-Citic Agricultural Fund plans to purchase US$50 million together. Orix will buy US$20 million.
At US$1.1 billion, Nongfu Spring's first-time share sale is set to be the world's second largest F&B IPO after coffee giant JDE Peet's's US$2.8 billion offering in Amsterdam in May, according to data compiled by Bloomberg.
The listing of Nongfu could kick off the next wave of IPOs in Hong Kong after an earlier flurry of deals in June. Yum China, China's largest restaurant company, is also looking to sell shares in the Asian financial hub as soon as September that could raise about US$2 billion, Bloomberg reported this month. Almost US$19 billion has been raised through first-time share sales in the city so far in 2020, compared to US$10.6 billion for the same period last year, data compiled by Bloomberg show.
Founded in 1996, Nongfu had the biggest market share in China's packaged drinking water market from 2012 to 2019, according to its prospectus, citing research by consulting firm Frost & Sullivan. It also makes tea and juice beverages.
Nongfu plans to use proceeds for purposes including brand building, equipment purchase and building production facility.
The company plans to price the offering on Aug 28 and to list on the Hong Kong stock exchange on Sept 8. China International Capital and Morgan Stanley are the joint sponsors.