Huazhu Group files prospectus for secondary listing in Hong Kong
09/10/2020|12:16:47 PM|Morning Star

Nasdaq-listed Huazhu Group is planning a secondary listing in Hong Kong, joining the list of Chinese firms seeking to tap the home market.

The multibrand hotel group in China that counts Accor SA and Group as its shareholders has appointed Goldman Sachs and CMB International as joint sponsors for a potential Hong Kong listing, according to a draft prospectus filed with the Hong Kong stock exchange on Thursday.

The draft prospectus didn't mention the timing or the size of the deal.

But in a separate filing to SEC, Huazhu said it's offering 20,422,150 ordinary shares, consisting of an international offering of 18,379,850 ordinary shares offered hereby, and a Hong Kong public offering of 2,042,300 ordinary shares. 

On September 8, the last reported trading price of Huazhu's ADSs on Nasdaq was USD 43.41 per ADS, or HKD 336.44 per ordinary share. Each ADS represents one ordinary share. The company said the maximum offer price for the Hong Kong public offering is HKD 368.00, or USD 47.48. That means Huazhu will raise no more than USD 970 million through the second listing in Hong Kong.

If successful, Huazhu would add to a series of recent secondary listings in Hong Kong by Chinese companies whose shares are already traded in New York, such as Alibaba Group Holding Ltd., Inc. and NetEase Inc.

Huazhu operates several upscale hotels including Steigenberger Hotels & Resorts and Grand Mercure.

As of June 30, Huazhu had 6,187 hotels in operation, including 758 leased and owned hotels and 5,429 manachised and franchised hotels, with an aggregate of 599,235 hotel rooms, the prospectus said.

French hospitality company Accor owns 5.23% stake in Huazhu while has a 7.4% stake and Invesco Ltd. owns a 12.11% stake.

As of June 30, approximately 96% of legacy Huazhu's hotels had resumed operations with an occupancy rate of approximately 83% in early June 2020, it said.

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