Date
24 July 2017
Tencent's online publishing and e-book subsidiary is expected to raise up to US$800 million in a Hong Kong IPO. Photo: Bloomberg
Tencent's online publishing and e-book subsidiary is expected to raise up to US$800 million in a Hong Kong IPO. Photo: Bloomberg

Tencent’s online publishing unit files for Hong Kong IPO

China Literature Ltd., an online publishing and e-book unit of Tencent Holdings, has filed for a Hong Kong initial public offering that could raise as much as US$800 million.

In a stock-exchange filing late Monday, the Chinese internet giant said the listing will help the unit expand its business and also seek potential acquisition opportunities, Reuters reports.  

Although the structure of the deal was not disclosed, Tencent has said it plans to hold at least 50 percent of China Literature after the spin-off.

The offering will consist of 15 percent of the firm’s enlarged share capital.

Bank of America Merrill Lynch, Credit Suisse and Morgan Stanley have been hired as joint listing sponsors.

Thomson Reuters publication IFR has previously reported that the deal could raise between US$600 million and US$800 million.

China Literature has a business akin to Amazon’s Kindle Store, operating a platform with 8.4 million literary works from 5.3 million writers.

The firm saw revenues jump 59 percent last year to 2.6 billion yuan (US$377 million), helping it post a net profit of 30.4 million yuan, compared with a loss of 354.2 million yuan a year earlier.

China Literature IPO marks a big win for the Hong Kong bourse, which has failed to attract a significant volume of technology deals despite being the world’s top destination for new listings in 2016, Reuters noted.

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