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Didi Plans Hong Kong Listing Without Raising Capital

The mechanism, known as “listing by introduction”, would allow owners of Didi US shares to transfer them to the Asian city’s bourse gradually


A trader works during the IPO for Chinese ride-hailing company Didi Global on the New York Stock Exchange on June 30, 2021. Photo: Reuters.

 

Didi Global plans to use a mechanism that will allow it to list shares in Hong Kong without raising capital or issuing new stock as it seeks to delist from the US, two people with knowledge of the matter said.

The plan comes as the Chinese ride-hailing company is moving towards withdrawing from the New York Stock Exchange under pressure from Beijing.

Didi ran afoul of Beijing by pushing ahead with a US initial public offering (IPO) earlier this year despite being asked to put it on hold pending a review of its data practices.

The Hong Kong mechanism, known as “listing by introduction”, would allow owners of Didi US shares to transfer them to the city’s bourse gradually.

Didi aims to file for the Hong Kong listing by April 30 and list by June, one of the people said.

A spokesperson for Didi, whose apps, in addition to ride-hailing, offer products such as delivery and financial services, did not immediately respond to Reuters request for comment.

Unlike typical IPOs, companies listing stock by introduction in Hong Kong raise no capital and issue no new shares. The mechanism was popular among companies in the past looking to build a brand in Hong Kong and the rest of China.

Didi chose Goldman Sachs, China Merchants Bank International and China Construction Bank International to manage the Hong Kong listing process, the people said. The banks declined comment.

The Chinese company has barred employees from selling shares in the company indefinitely, dealing a blow to staff of the Chinese ride-hailing group that has come under intense regulatory scrutiny after its listing in New York.

The end of a 180-day period during which current and former staff were not permitted to sell shares was set to end on Monday, but the prohibition has been extended.

The change marked the latest setback at the group, which has lost 60% of its value, or about $38 billion in market capitalisation, since its $4.4 billion New York IPO in June.

 

  • Reuters, with George Russell

 

 

READ MORE:

Uber CEO Intends to Sell Off Stake in Didi Global

Didi’s US Delisting Plan May Have Lost Hedge Funds $57m

Didi Seen Relaunching China Apps on End to Regulatory Probe

 

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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