Music streaming platform Cloud Village aims to raise up to HKD 3.52 billion ($ 451.6 million) through its initial public offering (IPO) in Hong Kong.
Cloud Village will offer 16 million shares, representing 7.7% of the total number of shares outstanding after the IPO, its parent company NetEase announced on Tuesday.
The IPO price of Cloud Village shares should not be less than HKD 190 per share and no more than HKD 220 per share, NetEase said.
NetEase will own more than 60% of Cloud Village
Parent company NetEase could acquire up to $ 200 million of Cloud Village shares as part of the IPO at HKD205 per share, the company said.
NetEase will own approximately 61.3% of Cloud Village after the IPO.
If the IPO continues, Cloud Village will have a market cap of between HKD 39.47 billion and HKD 45.71 billion, NetEase said.
Put option for 2.4 million additional shares
Cloud Village has the option to sell an additional 2.4 million shares after the company has listed in Hong Kong.
Cloud Village’s initial IPO plan was put on hold in August amid Beijing’s broad regulatory crackdown on the Chinese private sector.
Last week, NetEase announced that Cloud Village had relaunched its IPO application on the Hong Kong Stock Exchange (HKEX).
NetEase in a stock file said it expects Cloud Village’s net loss for 2021 “to register a substantial increase” from a year ago.
The parent company added that it expects Cloud Village to remain in deficit until the end of 2023.
“It (Cloud Village) has focused on growing its user base by investing in its brand and high quality content, rather than looking for immediate financial returns or profitability, in order to lay a solid foundation. for long-term development, ”NetEase said. .
HKEX approval expected
Cloud Village intends to use its IPO funds for the expansion of its library of music content, for investments in research and development initiatives related to artificial intelligence, machine learning and data analysis, mergers and acquisitions and general corporate purposes.
The music streaming service has reported intense competition in the music streaming industry, dependence on third-party licenses, regulatory risks, and the deterioration of Sino-U.S. Relations as potential risks to the business, among others. .
Investors are now waiting for the HKEX to give the go-ahead for the IPO.
Read more: Music streaming company Cloud Village restarts the Hong Kong IPO
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