Chinese retail giant plans store expansion with IPO
China's leading hypermarket operator Sun Art Retail Group said Sunday it plans to open over 50 new stores by the end of 2012, as it seeks to raise up to $1.06 billion from a Hong Kong share sale.
The retail giant, backed by France's Groupe Auchan SA, will start to sell 1.14 billion shares, priced between HK$5.65-7.20 (72-93 US cents) each, to investors on Monday. It plans to list on the Hong Kong bourse on July 15.
Company executives said they remained positive despite the recent slump in global stock markets, and planned to use half of the proceeds from the offering to open 51 stores in mainland China by the end of next year.
"We are not too concerned about the global market turmoil -- otherwise we would not be here," chief executive Bruno Mercier told reporters in Hong Kong via video conference.
Sun Art, which currently has 197 hypermarkets in China, has secured locations for a total of 121 new stores but has set no date for the opening of the remaining 70, Mercier said.
The retailer said it has secured nine cornerstone investors including Singapore's sovereign wealth fund.
The group, previously known as Sun Holdings Greater China Ltd, is a joint venture between Taiwanese supermarket-to-cement conglomerate Ruentex Group and Groupe Auchan, a French retailing giant.
The offering, the latest bid by a Chinese firm to tap Hong Kong's IPO market -- the world's biggest in 2010 -- comes despite waning investor interest amid global volatility.
Italian luxury goods maker Prada made a lacklustre stock debut in Hong Kong two weeks ago after raising a lower-than-expected $2.14 billion in its share sale.
Australian miner Resourcehouse last month shelved an IPO originally slated to raise as much as $3.6 billion, citing weak market conditions.
© 2011 AFP