Chinese Spirits Company ZJLD To Raise $811 Million In IPO

Based on the exchange filings on Monday, Chinese spirits company ZJLD Group plans to raise up to HK$6.37 billion ($811.5 million) in a Hong Kong initial public offering (IPO), the largest in the financial centre this year.

The company, which is backed by US private equity firm KKR & Co Inc, is offering approximately 490.7 million shares at a price range of $HK10.78 to HK$12.98 per share. According to the filings, this would raise between $674 million and $811.5 million.

ZJLD would be worth $5.4 billion at the top of the range. The final price will be determined on Thursday, with shares expected to begin trading on April 27.

There is also a so-called "greenshoe" option to sell another 73 million shares that could raise an extra $122 million, according to the filings.

ZJLD produces baijiu, a colourless distilled spirit that is popular throughout China. According to ZJLD's prospectus, Baijiu is considered China's national liquor and the world's most consumed liquor.

Baijiu accounts for 69.5 percent of China's alcoholic beverage market. According to its documents, its market share in China is greater than that of wine in France and beer in the United States.

KKR owns 16.2% of the company, which will drop to 13.8% after the IPO, Hong Kong's largest since 2007. CALB Group Co, a Chinese lithium battery manufacturer, raised $1.3 billion in October.

According to Refinitiv data, new share sales in Hong Kong raised only $508.3 million in the first quarter of this year.

Dealmakers expect IPO volumes in the city to increase in the second half of 2023 and into next year as markets stabilise and major firms such as Alibaba Group and JD.com plan a number of spin-off listings.