Chinese firms flock to Switzerland to lift cash with new inventory listings

BEIJING — Chinese firms trying to increase money abroad have turned to Switzerland — and gotten speedy regulatory approval to take action.

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

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

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

The newest listings aren’t preliminary public choices, however replicate a brand new channel for Chinese firms listed on the mainland China A share market to lift capital abroad.

The 4 firms — 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 brand new China-Swiss inventory join program with the Shanghai and Shenzhen exchanges. The 4 firms function in new vitality or manufacturing industries.

Chinese firms’ entry to abroad capital markets has come below 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 facet, new laws round consumer privateness and nationwide safety have raised the bar for abroad public choices. Potential failure to succeed in an audit settlement with the U.S. threatens the delisting of many Chinese firms from New York inventory exchanges.

But firms trying to checklist in mainland China and Hong Kong usually face extra stringent necessities than within the U.S. market.

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

While Chinese firms await readability on a sooner IPO course of, some which can be capable of are turning to Switzerland.

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

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