(Bloomberg) -- Home Credit NV, the consumer lender owned by Czech billionaire Petr Kellner, scrapped a $1.5 billion share offering in Hong Kong, where authorities are keen to demonstrate that months of street protests haven’t disrupted business.
Amsterdam-registered Home Credit, the majority of whose loan book is in China, said Thursday that “due to market conditions it has decided not to proceed with a global offering” on the Hong Kong Stock Exchange. The company gave no more details.
Local and Chinese officials are trying to persuade the world that the city gripped by unprecedented civil unrest has a future as a financial hub. Alibaba Group Holding Ltd., China’s biggest e-commerce company, on Wednesday raised about $11 billion in a long-awaited stock sale, a move that looks set to please officials in Beijing.
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Alibaba Raises $11 Billion in Hong Kong Market Rocked by Unrest Czech Tycoon Said Poised to Delay Home Credit IPO to Next Year Hong Kong Isn’t Dead Yet to Moneyed Classes With One Eye on Exit |
Home Credit started gauging demand for its share sale in September and was targeting a market capitalization of as much as 10 billion euros ($11 billion), according to people with knowledge of the matter.
But investors pushed back on that valuation -- forcing the company to reassess its plans -- seeing Home Credit as worth between 5 billion euros and 7.5 billion euros, the people said.
The lender is controlled by Kellner’s investment firm PPF Group NV, which had more than 47 billion euros of assets at the end of June. Kellner, the richest man in the Czech Republic with an estimated net worth of $12.5 billion, in February scrapped a plan to sell Home Credit’s Czech and Slovak businesses to local rival Moneta Money Bank AS.
Home Credit, founded in 1997, offers point-of-sale loans and other types of borrowing in nine countries across across Asia, central and eastern Europe and the former Soviet Union, according to a preliminary prospectus in September. It had 21.1 billion euros of outstanding gross loans at the end of June, with China accounting for 63% of the total.
Hong Kong’s stock market is in the midst of a dramatic week. The Hang Seng Index started off strong, rallying on Monday and Tuesday partly on optimism about a U.S.-China trade deal.
A U.S. Senate bill supporting Hong Kong protesters drew a sharp rebuke from Beijing on Wednesday, and equities gave up some gains. Unrest raged in a city that for months has been wracked by escalating violence between police and democracy protesters.
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