Thumbnail: 

Chow Tai Fook Jewellery Group Ltd., a Hong Kong-based Jewelry chain, may beat Prada SpA with a HK$22 billion ($2.8 billion) initial public offering this year. The plan may also be Hong Kong’s biggest IPO in 2011.

According to a prospectus obtained by Bloomberg, Chow Tai Fook set a price range of HK$15 to HK$21 for the 1.05 billion new shares on sale. The price will be set on Dec. 9. The company's shares will start trading Dec. 15, according to a term sheet.

Half of the funds raised by the company will be used to buy raw materials and inventory, 36.5 percent will go toward repayment of loans and 5 percent will be spent on buying properties and renovating stores, according to the prospectus. The remainder will be used to buy production and research and development equipment, build an office in Shenzhen and for working capital.

“We are confident that the company will continue to benefit from China’s robust retail sales growth in the long term, and we’ll focus on expanding our retail network in Greater China,” Henry Cheng, executive chairman, said during a video conference call in Hong Kong yesterday.

Cheng said one of the reasons the 82-year-old family-run business is seeking a public listing is to improve transparency and make it more independent.

The offering will test investors’ appetite as Prada SpA dropped since first trading in June after raising $2.5 billion, including stock sold under the overallotment option, in Hong Kong’s biggest IPO this year.

MORE ARTICLES ON IPO

Quote Image: