(Bloomberg) -- China Resources Beverage Holdings Co. is seeking to raise as much as $649 million in its Hong Kong initial public offering, one of the city’s largest listings this year.
The owner of the C’estbon water brand attracted a unit of China Tourism Group, UBS Asset Management AG and Oaktree Capital Management LP as cornerstone investors for the share sale. Boyu Capital and China Post Life Insurance Co. are among other cornerstones, the company’s listing document showed Tuesday.
With the overallotment option, which allows IPO arrangers to sell additional shares, China Resources Beverage could raise as much as $747 million.
The company will start taking orders Tuesday and shares are due to start trading on Oct. 23. It is selling 347.8 million shares at HK$13.50 to HK$14.50 each.
The cornerstone investors, which commit to hold shares for at least six months, have agreed to buy $310 million in China Resources Beverage stock in the offering, the company said, confirming an earlier Bloomberg News report.
At the top end of the marketed range, the IPO would give China Resources Beverage a market value of HK$34 billion ($4.4 billion). It previously sought a valuation of as much as $6 billion, but faced some resistance from prospective investors, partly due to a slump in competitor Nongfu Spring Co.’s share price, Bloomberg reported in August. Nongfu has dropped 32% this year.
The China Resources Beverage IPO marks another step forward in the tentative recovery of first-time share sales in Hong Kong, aided by Beijing’s stimulus pledges that ignited a sharp, albeit volatile, rebound in Chinese stocks.
Horizon Robotics, a Chinese provider of software and hardware used in autonomous driving systems, is also planning to launch a larger-than-expected Hong Kong IPO this week, Bloomberg reported Monday.
China Resources Beverage plans to use the IPO proceeds to expand its production capacity and sales and marketing activities, among others. The company posted a profit of 460.7 million yuan ($64.8 million) on revenue of 4.1 billion yuan for the first four months of the year, according to its prospectus.
IPOs in Hong Kong have raised more than $7 billion this year, eclipsing last year’s total but way below the $51.6 billion raised in 2020, according to data compiled by Bloomberg.
--With assistance from Noele Illien and Shikhar Balwani.
(Updates with details on Nongfu in sixth paragraph and use of IPO proceeds. An earlier version was corrected to rectify the identity of a cornerstone investor.)
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