Hongguo to offer 500mn shares in IPO

40% of the net proceeds is aimed for expansion of its retail network.

Hongguo International Holdings Limited (“Hongguo”), a leading retailer of mid-to-premium women’s formal and casual footwear in China, announced on Sunday details of its proposed listing on the Main Board (“Main Board”) of The Stock Exchange of Hong Kong Limited (“HKEx”).

In its Global Offering, Hongguo will offer a total of 500,000,000 shares of which 50,000,000 shares shall be sold in the Hong Kong Public Offering and 450,000,000 shares shall be sold in the International Offering. In addition, the selling shareholder intends to grant to the underwriters an over-allotment option requiring the selling shareholder to sell up to 75,000,000 additional shares, representing up to 15% of the initial size of the Global Offering.

The offer price will range between HK$2.30 and HK$3.24 per share. At the mid-point of the indicative offer price range, the Company’s net proceeds from the Global Offering will amount to approximately HK$757.7 million.

Citigroup Global Markets Asia Limited and DBS Asia Capital Limited are the Joint Sponsors, Joint Global Coordinators and Joint Bookrunners of the proposed listing, according to a Hongguo report.

The Hong Kong Public Offering will open at 9am on Monday, 12 September 2011 and close at noon on Friday, 16 September 2011. The offer price is expected to be determined on Saturday, 17 September 2011 and allotment results will be announced on Thursday, 22 September 2011. Trading of the Company’s shares on the HKEx is expected to commence on Friday, 23 September 2011 under the stock code 1028. Shares will be traded in board lots of 1,000 shares each.

The Company intends to use approximately 40% of the net proceeds to expand its retail network by opening a net number of approximately 200-280 proprietary outlets featuring its self-developed brands in each of the years ending December 31, 2011, 2012 and 2013. Approximately 25% will be used for the expansion and maintenance of its production facilities as well as construction of offices and warehousing facilities, approximately 20% will be used for selective acquisition of footwear businesses, approximately 10% will be used for repayment of a portion of the loan balance, and the remaining amount of approximately 5% will be used to expand online sales.