Victoria's Secret Owner to Invest in Crystal's $574 Million IPO

(Bloomberg) -- Garment supplier Crystal International Group Ltd. attracted cornerstone investors including Fast Retailing Co. to its Hong Kong initial public offering, which is seeking to raise as much as $574 million.

The Hong Kong-based company is offering 509.3 million shares at HK$7.30 to HK$8.80 apiece, according to terms for the deal obtained by Bloomberg on Tuesday. Fast Retailing, which runs the Uniqlo fashion chain and is a Crystal International customer, has agreed to buy $20 million of stock in the offering. L Brands Inc., owner of Victoria’s Secret, committed to buy $10 million of stock, the terms show.

Crystal International’s IPO will be the biggest on the city’s bourse from a home-grown Hong Kong company in more than two years, according to data compiled by Bloomberg. Mainland Chinese firms have increasingly dominated fundraising on the exchange, accounting for every deal above $500 million since the start of last year.

The company plans to use 45 percent of the proceeds to expand its manufacturing capacity and 25 percent to repay a loan related to its acquisition of Singapore-based sportswear manufacturer Vista Corp. Holdings Ltd. Another 20 percent will go toward upstream vertical expansion, while 10 percent will be used to replenish its working capital, the terms show.

Morgan Stanley and HSBC Holdings Plc are joint sponsors for the offering, according to an earlier Hong Kong stock exchange filing.

Crystal International emerged from a wave of consolidation in the manufacturing industry to become the world’s biggest apparel manufacturer in terms of production volume, the filing shows. The company has manufacturing facilities in Vietnam, Cambodia, Bangladesh and Sri Lanka, as well as in China. 

Chairman Kenneth Lo founded a predecessor of Crystal International in 1970. He is the eldest son of Law Ting-pong, the late founder of Hong Kong apparel retailer Bossini International Holdings Ltd.

To contact the reporter on this story: Crystal Tse in Hong Kong at ctse44@bloomberg.net.

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Darren Boey