CHINA: Meat processor WH Group details $5.3bn IPO
WH Group confirms listing
WH Group, the world's largest pork producer, has announced plans to list in Hong Kong in an initial public offering that could raise more than HK$42bn (US$5.3bn).
WH Group said today (15 April) it will sell 3.65m shares priced at HK$8-11.25. If demand is strong enough, the company has an option to increase the number of shares listed by 20%.
The Chinese company, which acquired US pork giant Smithfield Foods last year for US$4.7bn plus the assumption of debt, intends to use a significant proportion of the proceeds to pay down loans associated with the takeover.
In its prospectus, WH Group again outlined its strategy to import pig meat from the US to meet booming demand for pork in China. According to the firm, from 2010 to 2012 hog prices were 40% lower in the US than in China.
WH Group stated: "We plan to import into China safe, high-quality and cost competitive fresh pork from the US, which we believe will positively affect turnover and margins for our China operations."
The group also revealed that it made a net loss of $67m last year, reversing from a profit of $468m in 2012 and $188m in 2011. The loss was "primarily" the result of bonus payments to executives totalling $639m following completion of the Smithfield deal.
Final pricing is due to be announced on 22 April and shares will begin trading on 30 April.
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