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NetEase’s Cloud Village Opts For Scaled Down $500m Hong Kong IPO

The company is selling 16 million shares, which represents 7.7% of its enlarged share capital, as part of a December 2 IPO. It submitted plans to the Hong Kong Exchange on Tuesday.


Netease
A price range of HK$190 to HK$220 has been set for institutional investors, according to a term sheet, which will give Cloud Village a market capitalisation of $5.4 billion to $6.2 billion. Photo: Reuters

 

NetEase’s music streaming business Cloud Village Inc is looking to raise up to $500 million in a Hong Kong initial public offering, according to regulatory filings, after shelving the deal earlier this year following China’s regulatory crackdown on tech companies.

The company is selling 16 million shares, which represents 7.7% of the enlarged share capital, as part of the deal submitted on Tuesday.

A price range of HK$190 to HK$220 has been set for institutional investors, according to a term sheet, which will give Cloud Village a market capitalisation of $5.4 billion to $6.2 billion.

A further 2.4 million shares can be sold as part of a so-called greenshoe option after the company lists on the Hong Kong Stock Exchange.

 

Trading Begins On December 2

Cloud Village will price its shares on November 26 and start trading on the Hong Kong Stock Exchange on December 2, according to the term sheet.

NetEase has subscribed for $200 million worth of stock as a cornerstone investor alongside Song Music with $100 million and Orbis Investments with $50 million, according to the term sheet.

Cloud Village scaled back the size of the IPO after initially aiming to raise at least $1 billion in August, sources said at the time.

But the deal was shelved then as global financial markets reacted to the range of Chinese regulatory tightenings ordered after the Didi Global IPO in the United States.

Cloud Village is considered the closest rival to Tencent’s music streaming service, which dominates the mainland Chinese market.

 

  • Reuters with additional editing by Jim Pollard

 


 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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