HONG KONG: China Tourism Group Duty Free Corp is aiming to raise up to US$2.16 billion (RM9.6 billion) through a new listing in Hong Kong, according to a term sheet reviewed by Reuters, in what will be the largest share sale in the city in 2022.

Shanghai-listed China Tourism is planning to sell 102.76 million shares priced between HK$143.50 and HK$165.50 (RM81.29 and RM93.75) each, the term sheet said.

China Tourism, which has built the largest duty-free retail network in China, did not immediately respond to a request for comment.

The launch of the deal comes as Hainan island, in China’s south where China Tourism has several major shopping outlets, remains under tight restictions due to an outbreak of Covid-19.

The price range represents a 29.3% to 38.7% discount to the stock’s 201.19 yuan closing price on Thursday in Shanghai.

Hong Kong share sales of Chinese listed companies are typically offered at a discount to entice investors to buy the stock but the flagged discount of China Tourism is higher than normal.

China Tourism’s Shanghai listed shares have recovered most of their losses since lockdowns across Hainan began to be ordered last week. Its shares are down 8.3% year to date.

China Tourism plans to set the final price next Thursday, the term sheet said.

Almost 40% of the stock on offer in the deal has been sold to cornerstone shareholders who will invest about US$795 million, according to the term sheet.

Sanya, a holiday city on the southern end of Hainan island at the centre of the Covid outbreak, reported 1,690 symptomatic and 1,504 asymptomatic cases from Aug 1 through Aug 10.

The duty-free shop operator’s deal, if executed, would surpass Tianqi Lithium’s US$1.71 billion listing in June to become the biggest share sale in Hong Kong in 2022.

There has been US$4.9 billion worth of initial public offerings and secondary share sales in the city this year compared with US$34.7 billion at the same time last year, according to Dealogic data. It is the slowest year-to-date for new listings since 2009. – Reuters