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FinanceChinese companies go to Switzerland to raise money with stock listings

Chinese companies go to Switzerland to raise money with stock listings

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

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BEIJING — Chinese companies wanting to raise money abroad have turned to Switzerland — and gotten speedy regulatory approval to achieve this.

That’s in accordance to Baker McKenzie, which mentioned it acted as authorized advisor for the primary 4 Chinese companies to listing shares by way of a brand new stock join program with Switzerland on July 28. The companies raised about $1.5 billion.

The China securities regulator permitted the brand new share issuance in “just a few weeks,” mentioned Wang Hang, a accomplice at Baker McKenzie’s capital markets follow in Beijing. He famous the approval course of for different share issuances might take a couple of months and even half a 12 months.

The China Securities Regulatory Commission didn’t instantly reply to a CNBC request for remark.

The newest listings usually are not preliminary public choices, however mirror a brand new channel for Chinese companies listed on the mainland China A share market to raise capital abroad.

The 4 companies — GEM, Gotion High-tech, Keda Industrial Group and Ningbo Shanshan — issued world depositary receipts (GDR) on the Six Swiss Exchange as a part of a new China-Swiss stock connect program with the Shanghai and Shenzhen exchanges. The 4 companies function in new vitality or manufacturing industries.

Chinese companies’ entry to abroad capital markets has come underneath elevated scrutiny because the high-profile suspension of Ant Group’s deliberate IPO in late 2020 and Beijing’s crackdown on Didi in the summertime of 2021.

On the Chinese aspect, new rules round person privateness and nationwide safety have raised the bar for abroad public choices. Potential failure to attain an audit settlement with the U.S. threatens the delisting of many Chinese companies from New York stock exchanges.

But companies wanting to listing in mainland China and Hong Kong typically face extra stringent necessities than within the U.S. market.

An EY report discovered that as of June 14, greater than 920 companies had been in line to go public in mainland China and Hong Kong. That was little modified from March.

Chinese companies lining up

While Chinese companies await readability on a quicker IPO course of, some which might be ready to are turning to Switzerland.

A shopper considering a Hong Kong IPO determined to prioritize a GDR itemizing in Switzerland, and pursue a Hong Kong itemizing later, Wang mentioned, citing a dialog the morning of Thursday, July 28.

Since information of the forthcoming China-Swiss join program earlier this 12 months, “at least 13 Chinese listed companies have already announced their intention” to provide shares, Wang mentioned. “There are other companies planning for that but haven’t made the announcement.”

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