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Chinese companies come to Switzerland to raise capital by listing shares


Four Chinese companies raised about $1.5 billion in July by issuing shares on the Six Swiss Exchange through a new China stock matchmaking program.

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BEIJING – Chinese companies looking to raise cash abroad have turned to Switzerland – and have received swift regulatory approval to do so.

That’s according to Baker McKenzie, who said they acted as legal advisors to the first four Chinese companies to list shares through a new stock matching program with Switzerland on July 28. this company raised about $1.5 billion.

China’s securities regulator has approved a new share offering in “just a few weeks,” said Wang Hang, partner at Baker McKenzie’s capital markets agency in Beijing. He noted that the approval process for other stock issues can take months, even half a year.

The China Securities Regulatory Commission did not immediately respond to CNBC’s request for comment.

The latest listings are not an initial public offering, but reflect a new channel for Chinese companies listed on the mainland China A-share market to raise capital overseas.

Four companies – GEM, Gotion High-tech, Keda Industrial Group and Ningbo Shanshan – have issued global depository receipts (GDRs) on the Six Swiss Exchange as part of the new China-Swiss securities matching program with Shanghai and Shenzhen exchanges. Four companies operate in the manufacturing or new energy industries.

Chinese companies’ access to overseas capital markets has come under closer scrutiny since Ant Group suspended its planned IPO in late 2020 and Beijing’s crackdown on Didi over the summer. year 2021.

On the Chinese side, new regulations on user privacy and national security have raise the bar for overseas public offerings. The possibility of not reaching an audit agreement with the US risks causing many Chinese companies to be delisted on the New York Stock Exchange.

But companies that want to list in mainland China and Hong Kong often face more stringent requirements than the US market.

An EY report shows that as of June 14, more than 920 companies lined up went public in Mainland China and Hong Kong. That has changed little from March.

Chinese companies line up

While Chinese companies are waiting for clarity on a faster IPO process, some are likely to be turning to Switzerland.

A client contemplating an IPO in Hong Kong decided to prioritize listing GDR in Switzerland and pursue listing in Hong Kong afterwards, said Wang.

Mr. Wang said that since news of the upcoming China-Switzerland connection program earlier this year, “at least 13 Chinese listed companies have announced their intention to offer shares.” . “There are other companies that are planning for that but haven’t made an announcement yet.”

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