Chinese Luxury Car Finance Firm Seeks $428 Million in Hong Kong IPO
(Bloomberg) -- Shanghai Dongzheng Automotive Finance Co., which specializes in loans for luxury cars, is seeking to raise as much as $428 million in a Hong Kong initial public offering.
The financing unit of car dealer China Zhengtong Auto Services Holdings Ltd. is offering 533.3 million shares at HK$4.20 to HK$6.30 apiece, according to terms for the deal obtained by Bloomberg. The Chinese firm expects to price the offering March 19 and begin trading March 26, the terms show.
Dongzheng Automotive is entering a relatively quiet Hong Kong market for first-time share sales. Deals in the city have raised $1.4 billion this year, about half of the total volume during the same period in 2018, data compiled by Bloomberg show. The biggest share sale, from CStone Pharmaceuticals, raised $285 million, the data show.
Most of the proceeds will be used to fund retail loans to customers, including those who buy cars from Zhengtong Auto Services, the terms show. The company distributed 6.1 billion yuan of retail loans for luxury car purchases in 2018, according to a regulatory filing.
Dongzheng Automotive, founded in 2015, provides financing for brands including Porsche, BMW, Mercedes-Benz and Jaguar, the filing shows. China International Capital Corp. and Credit Suisse Group AG are joint sponsors of the offering.
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