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China hotpot chain Haidilao starts gauging demand for Hong Kong IPO

Hong Kong

HAIDILAO International Holding Ltd, China's biggest hotpot restaurant chain, has started gauging investor demand for its planned Hong Kong initial public offering.

The Beijing-based firm kicked off its so-called investor education on Monday, according to the terms for the deal obtained by Bloomberg. The IPO could raise as much as US$1 billion, people familiar with the matter said earlier.

Any deal would add to the US$24.5 billion of first-time share sales in Hong Kong this year, more than double the US$9.5 billion of deals during the same period in 2017, data compiled by Bloomberg show.

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Meituan Dianping, the Chinese food delivery giant, has set terms for a Hong Kong IPO of as much as US$4.5 billion, people with knowledge of the matter said.

Haidilao plans to use 60 per cent of IPO proceeds to finance expansion, while 20 per cent would go towards developing and implementing new technology, the terms show.

The company aims to use 15 per cent of proceeds to repay debt, and the remainder for working capital.

The chain's restaurants are known for serving spicy broths and providing attentive customer service, which includes giving free manicures, shoulder massages and dance performances.

CMB International Capital Corp and Goldman Sachs Group Inc are joint sponsors for the share sale. BLOOMBERG