China’s WH Group has a successful first round at the Hong Kong stock exchange.
Chinese pork firm – WH Group – witnessed a 10% surge as they made their debut at the Hong Kong Stock Exchange on Tuesday, August 5th 2014. The shares went up to as high as HK$16 bn through the share sale and this will help to reduce the group’s debt.
The recent listing will mark the firm’s second attempt to sell its shares as it cancelled its initial plan to raise up to $5bn in April 2014.
The entire blame for the cancellation was put on the “deteriorating market conditions” and “excessive market volatility”. In an attempt to make the share sale a success, the WH Group cut the size of its planned listing by half and reduced the price by about a third, and also hired far fewer banks to manage the deals.
Hong Kong investors rushed towards the listing that was oversubscribed; WH’s initial trading on Tuesday witnessed a HK$6.86 rise, which was a major increase from its list price of HK$ 6.20.
Some of the brokers say that it is likely that the WH Group will turn back to its investors in the near future so that it can raise money to pay off heavy debts.
The WH Group had taken up a huge debt that it bought from a US firm – Smithfield Foods in 2013 for $4.7 bn in cash.
Photo Credits: NY Times