COUNTRY REPORT CHINAThe range represents a 2019 P/E of 10.5–
13.6. There is a 15% greenshoe.
The deal has attracted four cornerstone
investors to take up a combined US$60m.
Baidu Holdings has pledged US$20m,
Lenovo Manufacturing US$15m, Shanghai
WonderTek Software US$15m and Crotona
Assets US$10m.
The deal will price on December 12
and the share are due to start trading on
December 19.
The company, which listed on the
Nasdaq in 2000, was taken private by a
Citic Capital-led consortium and delisted in
2014.
Citic Capital is the controlling
shareholder with a 34.06% stake.
Citigroup and CLSA are joint sponsors for
the float and joint bookrunners with CMB
International, HSBC and Nomura.
› 360 FINANCE LAUNCHES NYSE IPO
360 FINANCE, a Chinese online consumer
lender, has opened the books for an NYSE
IPO of up to US$57.4m.
The Shanghai-based company is offering
3.1m primary shares in an indicative range
of US$16.50–$18.50 each, representing a
forecast 2019 P/E multiple of 5.4–6.0.
There is a 15% greenshoe option on the
base deal.
The current deal size is 71% smaller than
the US$200m the company filed to the
Securities and Exchange Commission last
month.
The deal will price on December 13.
Founded in 2016, the company provides
digital loans to small and medium-sized
Chinese enterprises. As of September 30, it
had facilitated over Rmb94.4bn of loans for
its 6.4m clients.
The lender posted a loss of Rmb572m for
the six months ended June 30, much wider
than Rmb67m a year earlier, according to
regulatory filings.
About 40% of the IPO proceeds will be
used for brand promotions, 30% for R&D
and internal training and the remaining
30% for general corporate purposes.
360 Finance is the finance partner of
360 Group, formerly known as Qihoo 360Technology, a Chinese software maker
which delisted from the NYSE in 2016.
AMTD, Citigroup, Haitong and Lighthouse
Capital are joint bookrunners. Goldman Sachs
is no longer working on the deal.› FOSUN TOURISM IPO RAISES HK$3.34BNFOSUN TOURISM, a unit of Fosun International
and the operator of Club Med resorts, has
priced its Hong Kong IPO at the bottom of
an indicative price range.
The IPO raised HK$3.34bn through the
sale of 214.2m shares, or 17.5% of the
enlarged share capital, at the bottom of the
HK$15.60–$20.00 price range. There is a
15% greenshoe.
The price translates to a 2019 EV/Ebitda
of 8.5 based on the operating business.
Three cornerstone investors are taking
part in the deal. Shun Tak has pledged
US$34m, China Suchuang Energy US$9.6m
and Taobao China US$5m.
Shares of Fosun Tourism will start
trading on December 14.
Proceeds will be used to developeHi Car Services signs US$180m facility
Loans NYSE-listed car rental company’s buyout delayed indefinitelyNew York-listed car rental company EHI CAR
SERVICES has signed a US$180m three-year
loan after attracting six banks in general
syndication, even as its proposed buyout has
been delayed.
Deutsche Bank was the sole mandated lead
arranger and bookrunner of the facility, which
offered a top-level all-in pricing of 440bp
based on a marketed average interest margin
of 380bp over Libor and an average life of 2.5
years. Signing took place on Tuesday.
The borrower’s subsidiaries are the
guarantors. Funds are for general corporate
purposes and to refinance a US$200m 7.5%
unsecured three-year bond maturing on
December 8.
Separately, eHi is raising another US$20m
on an accordion basis. Two more banks are
processing the accordion, which is expected
to close by the end of this year.
Meanwhile, the proposed take-private
buyout of eHi led by CEO Ray RuipingZhang’s group has been delayed and there
is no clarity on its timing or likelihood of
completion, according to a Fitch report on
November 7.
On June 29, Ocean Link, a private equity
firm that invests in China’s travel and tourism
sector, submitted a revised non-binding bid
of US$15.50 per American depositary share
of the car rental firm. It followed an earlier
bid of US$14.50 per ADS with Nasdaq-
listed Ctrip.com International joining as a
consortium partner.
The Ocean Link consortium’s revised offer
is significantly higher than the US$13.50 per
ADS bid from a consortium led by Zhang.
The latter group comprises PE firms Baring
Private Equity Asia and MBK Partners, and
Redstone Capital Management (Cayman),
Dongfeng Asset Management and The
Crawford Group.
In April, Zhang’s consortium had lined up a
US$200m senior bridge facility from MorganStanley Senior Funding and Deutsche Bank
to buy out the borrower.
Fitch noted that eHi’s leverage has risen
sharply in the previous two years due to
ongoing capital expenditure for vehicle-fleet
expansion. The company’s funds-from-
operations-adjusted net leverage rose to
4.3x in 2017, from 3.4x in 2016 and 0.8x
in 2015. The company is exploring options
for reducing its cash outlay for vehicle
purchases, but Fitch believes deleveraging
is not probable in the next few years as eHi
has to balance its financial metrics against
the need to maintain market share in a fast-
growing market.
eHi raised a US$150m debut three-year
term loan in August 2016. Deutsche was
the MLAB of the facility, which paid an all-in
pricing of 410bp based on a margin of 350bp
over Libor and 2.5-year average life.
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