HONG KONG—Even as the slowdown in markets and volatility persists, a Chinese tea maker and a Shanghai restaurant chain started taking orders worth up to US$277 million from investors Monday ahead of Hong Kong listings in September, joining a mainland shoe retailer that kicked off its offering last week.
The IPOs come as Hong Kong's stock market struggles amid continued worries about an escalation of Europe's debt crisis. The benchmark Hang Seng Index closed down 4.21% at 19,031, its lowest level since May 25, 2010, when it closed at 18,985.
Tenfu, which sells Chinese tea and has 1,088 chain stores in China, plans to raise up to US$182 million in an IPO ahead of a Sept. 26 listing on the Hong Kong stock exchange, according to a term sheet seen by Dow Jones Newswires.
The company, which started order-taking from institutional investors Monday, is selling 208.62 million shares at an indicative price range of between HK$4.8 (US$0.62) and HK$6.8 each, the term sheet said, adding it will start its retail offering on Sept. 14.
Private-equity firm General Atlantic LLC is buying 73 million shares, or 35% of the offered shares, as a cornerstone investor, according to the term sheet. Cornerstone investors in Hong Kong are guaranteed large allotments in an IPO in exchange for agreeing to hold the shares a certain length of time, giving investors confidence in a deal at a time of volatile markets. General Atlantic is holding the shares for 12 months.
Meanwhile, Xiao Nan Guo, the Shanghai restaurant known for its yellow fish, also started taking orders from institutional investors Monday. It plans to raise up to US$95 million by selling 335 million shares at an indicative price range of HK$1.65-HK$2.20 each in an IPO ahead of listing in Hong Kong on Sept. 28, according to a term sheet seen by Dow Jones Newswires. If there is strong demand, the bankers on the deal can raise the size of the IPO by 15%, potentially raising as much as US$109 million.
Xiao Nan Guo has 51 stores in China.
The two deals join the up to US$208 million IPO by Chinese shoemaker Hongguo International Holdings Ltd, which started investors' order-taking last week and plans to list in Hong Kong on Sept. 23.
Separately, Beijing-based Hai Run Media plans to raise US$150 million-US$200 million in a Hong Kong IPO in the fourth quarter, people familiar with the situation said Monday, adding the company will be the first Chinese TV series producer to list in Hong Kong if the plan goes ahead. The company has hired Deutsche Bank AG and Nomura Holdings Inc to handle the IPO, the people said.
Hai Run is one of the largest privately owned TV series producers in China. On average, it makes 600 episodes a year from 20 TV series, according to the company's website. Other than producing TV shows for the Chinese market, the company also distributes TV programs in Asia, Europe and the U.S., according to the website.
Write to Prudence Ho at prudence.ho@dowjones.com
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