Hong Kong Exchanges & Clearing is discussing secondary listings with Chinese technology companies including Trip.com Group (also known as Ctrip) and Netease after Alibaba raised $13 billion in its 2019 share offering in the city, according to a Bloomberg report.
Bourse officials have held follow-up talks with the two U.S.-listed firms about the possibility of a secondary share sale. The discussions are preliminary and subject to change.
Total fundraising from Hong Kong initial public offerings will drop by as much as 27% in 2020 to HK$230 billion ($29.5 billion), PwC estimated on Thursday. About 180 companies may debut, with more “new economy enterprises” to seek listings thanks to rule reforms.
A secondary offering in Hong Kong would help Chinese tech companies hedge their risks as U.S. tensions simmer. It could also help raise capital to tide them over an economic slowdown and increasing competitive pressure in 2020.
Ctrip, in particular, has about $700 million worth of convertible bonds due in July. Its shares are trading at about $33.50, 38% below the agreed convertible price of $54, according to data compiled by Bloomberg.
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