China’s SenseTime postpones $767 million Hong Kong IPO after US ban
After being placed on a US investment blacklist, Chinese artificial intelligence start-up SenseTime Group postponed its $767 million Hong Kong initial public offering (IPO) on Monday.
SenseTime stated that it was still dedicated to completing the offering and that it would release a revised prospectus as well as an updated listing timeline.The company’s proposal to withdraw the offering and rewrite its prospectus to highlight the potential impact of the US investment prohibition, with the goal of resuming the IPO process, was first reported by Reuters on Monday.
According to regulatory documents, SenseTime planned to offer 1.5 billion shares at a price range of HK$3.85 to HK$3.99. This would bring the total amount raised to $767 million, down from a target of $2 billion earlier this year.Instead of announcing its listing price on Friday as planned, it found itself in urgent talks with the Hong Kong Stock Exchange and its lawyers regarding the deal’s viability amid concerns of a looming blacklist.In a filing to the Hong Kong Stock Exchange on Monday, SenseTime did not disclose any information on the timeline for a revised IPO.
In the filing, the business stated, “The company is dedicated to completing the global offering and listing as soon as possible.”
According to one insider, the company was attempting to act rapidly in order to avoid having to totally resubmit the IPO after Jan. 9, when its financial numbers in the current prospectus would need to be updated. According to the source, the company had kept roughly $450 million from cornerstone investors and could expect the majority of them to continue in the deal.
“We expect investor sentiment to be low,” Shifara Samsudeen, a LightStream Research analyst who publishes on Smartkarma, told Reuters. “Even if the company offers an updated prospectus with more risk factors and goes ahead with a public listing, we expect investor sentiment to be low, which will likely impact future pricing of its shares and their performance post-IPO.”
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