The proposed listing of Wilmar International's China unit, Yihai Kerry Arawana (YKA), is expected to raise 13.9 billion yuan (S$2.8 billion), and Singapore's sovereign wealth fund GIC will be a strategic investor.
Agri-food giant Wilmar said in a bourse filing yesterday that the amount is based on an issue price of 25.7 yuan per YKA share and the number of new shares to be issued by YKA.
The issue price was jointly determined by China Securities, the sponsor and a joint lead underwriter of the proposed listing, and China International Capital, the other joint lead underwriter, said Wilmar.
The issue price translates to a price-to-earnings multiple of 31.12 times, based on YKA's FY2019 recurring net profit and enlarged post-initial public offering (IPO) share capital. The average price-to-earnings multiple of other listed firms in the same industry as YKA - being the agricultural and food processing industry group - for the immediate preceding month was 41.86 times.
The issue price was determined based on investor demand and took into consideration, among other things, prevailing market conditions, the industry that YKA is engaged in, the comparable valuations of other listed companies in the same industry, the YKA group's fundraising requirements, and the joint lead underwriters' underwriting risk, Wilmar said.
It added that 20 strategic investors, comprising state-owned funds, sovereign wealth funds and insurance companies, have been allocated 30 per cent of the IPO shares which will be subject to a one-year moratorium on transfer, beginning from the first trading date.
GIC will be allotted a stake worth 472.5 million yuan. Besides the Singapore sovereign wealth fund, other strategic investors include Rongze Investment Company with an allotment amount of 770.9 million yuan and People's Daily Media and Advertising Company with 397.9 million yuan.
While the proposed listing is planned to take place by mid-October, it is still subject to prevailing market conditions, and there is no certainty that it will proceed, Wilmar said.
The company called for a trading halt on Wednesday morning, which it lifted yesterday morning. Wilmar shares fell 0.5 per cent to $4.36 yesterday.
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