Lufax Holding Ltd., a Chinese fintech firm seeks fundraising of close to $2.36 billion in an initial public offering. The technology firm is backed by Ping An Insurance Group Co. It is marketing close to 175 million American depositary shares for $11.50 to $13.50 each. Two ADS constitute an ordinary share.
Chinese fintech firm, Lufax to go public in the US amid tensions between Washington and Beijing
Lufax is going public in the United States as tensions between Washington and Beijing are receding. The world’s two biggest economies have clashed over trade, data privacy, and access to capital markets.
The US regulators threatened to bar Chinese companies from American exchange in August. Beijing had refused to allow inspection of their firm’s audits causing this subsequent action. Nonetheless, several firms from China and Hong Kong have been successful in raising around $10.9 billion through the US IPOs this year, which is the most since 2014, as reported by Bloomberg.
Lufax Holdings to be valued at $33 billion based on outstanding shares listed on prospectus
The Chinese fintech firm is among China’s largest peer-to-peer leaders, offering wealth management and retail lending services. It will be valued at $33 billion based on the outstanding shares that are listed on its prospectus.
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Lufax has explored an IPO for several years, and it restructured its business after the Chinese authorities launched a crackdown on the unruly P2P lending sector. It is backed by Ping An, China’s biggest insurer by market value. After the introduction of asset portfolio adjustment and restrictions on consumer finance products, its assets under management dropped by 6.1%, slashing transaction volumes by 30%.
Chinese financial giant reports a net profit of $1 billion for six months
The company has reported a net profit of around $1 billion on a total income of $3.64 billion for six months ending June 30. It plans to dedicate the funds from the IPO for investment in product development, technology infrastructure, sales and marketing activities, capital expenditure, global expansions, and other administrative matters. It might also use these funds for acquisitions or investments.
Lufax anticipates pricing the offering on October 29 and the shares to commence trading the next day on the New York Stock Exchange, as per the terms of the deal. Bank of America Corp., Goldman Sachs Group Inc., UBS Group AG, China PA Securities, and HSBC Holdings PLC will lead the offering.