Hotpot Chain Haidilao Starts Gauging Demand for Hong Kong IPO

(Bloomberg) -- Haidilao International Holding Ltd., China’s biggest hotpot restaurant chain, has started gauging investor demand for its planned Hong Kong initial public offering.

The Beijing-based firm kicked off so-called investor education Monday, according to terms for the deal obtained by Bloomberg. The IPO could raise as much as $1 billion, people familiar with the matter said earlier.

Any deal would add to the $24.5 billion of first-time share sales in Hong Kong this year, more than double the $9.5 billion of deals during the same period in 2017, data compiled by Bloomberg show. Meituan Dianping, the Chinese food delivery giant, has set terms for a Hong Kong IPO of as $4.5 billion, people with knowledge of the matter said.

Haidilao plans to use 60 percent of IPO proceeds to finance expansion, while 20 percent would go toward developing and implementing new technology, the terms show. The company aims to use 15 percent of proceeds to repay debt, the remainder for working capital.

The chain’s restaurants are known for serving spicy broths and providing attentive customer service, which includes giving free manicures, shoulder massages and dance performances. CMB International Capital Corp. and Goldman Sachs Group Inc. are joint sponsors for the share sale.

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, Timothy Sifert, Dominic Lau

©2018 Bloomberg L.P.