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Baring PE, Goldman-backed China dairy giant Shengmu to raise $170m in Hong Kong IPO

30 Jun 2014

milkPrivate equity-backed organic milk producer China Shengmu is set to float on the Hong Kong Stock Exchange targeting approximately HKD1.32bn ($170m).

The company plans to offer just over 444million shares, with one tenth offered in Hong Kong and the rest offered internationally according to a regulatory filing.

China Sengmu’s offer price is estimated at between HKD$2.95 and HKD2.39 per share, with the float date set for Monday July 14.

COFCO (Beijing) Agricultural Industrial Equity Investment Fund subsidiary Bao Hua has committed to being a cornerstone investor by buying $30m worth of shares, according to the Wall Street Journal.

Inner Mongolia-based Shengmu is the biggest organic dairy company in China, with 54.2 per cent market share in 2013 organic raw milk production volume.

The company said it would use the IPO proceeds to build six new farms and buy 15,000 cows, according to the term sheet.

The deal follows to other dairy company listings in Hong Kong last year, with YuanShengTai Dairy Farm raising $425 million in November and China Huishan Dairy’s $1.3 billion offering in September.

BOC International and Goldman Sachs will act as underwriters for the deal.

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