SenseTime discussing fate of $1.05 billion Hong Kong IPO with exchange: Sources

The US will reportedly put AI start-up SenseTime on an investment blacklist. PHOTO: REUTERS

HONG KONG (REUTERS) - Chinese artificial intelligence start-up SenseTime Group is discussing the fate of its planned US$767 million (S$1.05 billion) Hong Kong initial public offering (IPO) with the city's stock exchange on Friday (Dec 10), two people with direct knowledge of the matter said.

The move comes after the Financial Times reported on Thursday that the United States will put the company on an investment blacklist on Friday that would mean US-based investors cannot buy shares in the company.

The sources declined to be named, as the information was not yet made public. SenseTime had not been aware the blacklist was under consideration, the sources told Reuters on Thursday.

The Hong Kong Stock Exchange declined to comment and SenseTime did not immediately respond to Reuters' requests for comment.

SenseTime had planned to sell 1.5 billion shares within a price range of HK$3.85 to HK$3.99 (67 to 69 Singapore cents) each in the IPO. It was due to set the final price and allocate shares to institutional investors on Friday, according to the firm's filings.

The sources said SenseTime and its advisers held urgent talks late on Thursday and early on Friday on how the ban would impact its the IPO, which was in its final stages when the blacklist report was published.

US-based investors had lodged bids to buy stock during the bookbuilding process, one person with direct knowledge of the matter told Reuters.

But a second source said some investors started to pull their bids to buy shares once the likely ban was reported.

More than half of the deal, US$450 million, had been sold to cornerstone investors ahead of the transaction's expected launch on Monday. SenseTime is due to start trading on Dec 17, the filings showed.

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