CHINA: Hong Kong "approves WH Group listing plan"
WH Group "planning IPO"
WH Group, formerly Shuanghui International, has declined to comment on reports that it is preparing to list in Hong Kong.
According to a report in The Wall Street Journal, the company started investor meetings today (31 March) as it kicked off its premarket process in order to gauge investor appetite for an initial public offering. The WSJ said WH Group has secured approval from the Hong Kong Stock Exchange for the listing.
Citing unidentified sources, the newspaper said WH Group hopes to raise US$5-6bn, or 20 times its forecast earnings for 2014.
A spokesperson for the group told just-food the Chinese pork processor was not commenting on whether it plans to list.
Industry pundits believe much of the proceeds would be used to deleverage WH Group's balance sheet. China's largest pork group raised its debt burden in order to fund last year's takeover of US pork giant Smithfield Foods, which it acquired for $4.7bn.
In acquiring Smithfield, WH Group became the world's largest pork firm and secured supplies of US hogs to meet growing demand for pork in China.
However, while a swelling middle class has resulted in dynamic growth in the pork sector, the industry is faced with a number of challenges. Notably, recent events - such as last year's Jiapingtang River disaster where 16,000 dead pigs were found in the water - have meant food safety issues remain centre stage in China.
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