Xiaomi Corp said on Saturday that there is no time frame for a mainland China listing, flagging an indefinite delay in the plans for issue of China depositary receipts (CDRs).
The smartphone and telecom equipment maker did not say when it will restart the CDR issuance process or why it was postponing the mainland offering, Reuters reports.
Xiaomi had been expected to raise up to US$10 billion, split between its Hong Kong and mainland offerings. But in a surprise move last week, it postponed its mainland share offering until after it completes its scheduled July 9 listing in Hong Kong.
Sources told Reuters the CDR postponement was mainly because of a dispute between the company and Chinese regulators over the valuation, but Xioami denied this.
“We’ve had many rounds of discussions with the regulators and reached a consensus that to ensure the quality of our CDR issuance, it’s better that we go public in Hong Kong first,” Xiaomi’s Chief Financial Officer Shou Zi Chew was quoted as saying at a news conference in Hong Kong.
Xiaomi has lined up US$548 million from seven cornerstone investors including US chipmaker Qualcomm, for its Hong Kong IPO, Reuters reported earlier.
The Chinese firm is selling about 2.18 billion shares in a price range of HK$17-22, representing a multiple of 22.7–29.3 times 2019 earnings forecast by its underwriting syndicate.
The IPO values the Beijing-based company at US$54.3-70.3 billion after a 15 percent “greenshoe” or over-allotment option which can be exercised if there is demand.
The new valuation range is far below the US$100 billion figure that was doing the rounds in the market at one point in time.
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