Bosideng Issues 1,988 million Shares, To Raise Up To HK$6.52 billion
(Hong Kong, 26 September 2007) The leading down apparel company in the PRC, Bosideng International Holdings Limited ("Bosideng" or the "Company", HKSE stock code: 3998), today announced the details of its Global Offering and proposed listing on the Main Board of the Hong Kong Stock Exchange Limited ("HKSE").
Bosideng intends to offer a total of 1,988,000,000 Shares. The number of Shares to be initially offered for subscription or sale under the International Placing will be 1,789,200,000 Shares (subject to adjustment and the Over-allotment Option), of which 1,671,200,000 Shares are to be issued by the Company and 118,000,000 Shares are to be offered for sale by the Selling Shareholder, representing approximately 90% of the Offer Shares under the Global Offering. 198,800,000 Shares will be offered by way of a public offer in Hong Kong, representing 10% of the total number of the Offer Shares.
In connection with the Global Offering, the International Underwriters are granted by the Company an over-allotment option ("Over-allotment Option"). Pursuant to the Over-allotment Option, the Company will be required to allot and issue up to an aggregate of 280,500,000 additional Shares, representing in aggregate approximately 14.11% of the initial Offer Shares, at the Offer Price to cover over-allocations in the International Offering. The Offer Price will not be more than HK$3.28 and is currently expected to be not less than HK$2.56.
The net proceeds to be raised from the Global Offering, after deducting the underwriting fees and expenses payable by the Company in the Global Offering, assuming the Over-allotment Option is not exercised and an offer price of HK$2.92 per share (being the midpoint of the indicative offer price range), will be up to HK$5.225 billion. The proceeds will be used as follows:
- approximately 30%-40% will be used for expansion plans both domestically and in overseas markets such as Russia, Canada and the United States, including diversification into new product lines such as bedding products, home linen products, a selected range of non-down apparel products and other products that are less sensitive to seasonality patterns;
- approximately 15%-20% will be used to strengthen and expand retail distribution network;
- approximately 5% will be used for the continual implementation of branding strategies;
- approximately 5% will be used for research, design and development including product design, development of new materials and establishment of a quality inspection center;
- approximately 20%-30% will be used to repay existing bank borrowings; and
- the balance will be used to provide funding for working capital and other general corporate purposes.
Cenwise Investment Limited (which is indirectly wholly owned by Shau Kee Financial Enterprises Limited, which is in turn wholly owned by Lee Financial (Cayman) Limited, of which Dr. the Hon. Lee Shau Kee is a substantial shareholder), China Life Insurance Company Limited, Chow Tai Fook Nominee Limited (which is wholly and beneficially owned by Dato Dr. Cheng Yu-Tung), Equity Advantage Limited (which is ultimately 100% owned by the Dickson Poon family) and Li Ka Shing Foundation Limited have agreed to become the Corporate Investors of Bosideng.
Bosideng is the leading down apparel company in the PRC, with a significant lead over its closest competitor in terms of market share. The Company primarily focuses on developing and managing the portfolio of down apparel brands, which includes research, design and development, raw materials procurement, outsourced manufacturing and marketing and distribution of branded down apparel products. The Company's core brands comprise "Bosideng", "Snow Flying" and "Kangbo", and other brands comprise "Bingjie", "Shuangyu" and "Shangyu". In 2006, "Bosideng", "Snow Flying" and "Kangbo" down apparel products achieved a combined market share of 36.1% among the 30 largest down apparel brands in the PRC based on sales, according to the China Industrial Information Issuing Center.
Bosideng enjoys a well-respected brand portfolio in the PRC. "Bosideng" was the leading down apparel brand in the PRC for 12 consecutive years from 1995-2006, according to the China Industrial Information Issuing Center and National Bureau of Statistics of China. "Bosideng" brand was named as one of "China's Top Ten Brands in the World Market" by the World Confederation of Productivity Science, Chinese Association of Productivity Sciences and World Productivity Congress in 2006. In 2007,"Bosideng" was named as one of "China's Top 25 Brands (2006-2007) by the Brand Union Association, and was the only apparel brand amongst different industries which was awarded this prize for two consecutive years. In the same year, "Bosideng" was the only apparel brand named as one of China's three famous brands in the world by the PRC General Administration of Quality Supervision, Inspection and Quarantine.
Bosideng's goals are to further strengthen and expand its leading market position in the PRC down apparel brand industry while selectively diversifying into new products and new markets. To achieve these goals, Bosideng will step up its efforts in brand differentiation, brand loyalty and reputation through targeted marketing efforts as well as strengthen, expand and evaluate the retail distribution network for its branded down apparel products. The Company will enhance its product research, design and development capability and upgrade its supply chain management system. Bosideng will explore overseas expansion opportunities and will selectively diversify into new product lines.
Mr. Gao Dekang, Chairman and Chief Executive Officer of the Company said, "Over the years, we have reinvented the market from one that emphasized purely on functional qualities to one that embraces stylishness and fashionable elements. Thanks to our undisputed leadership, Bosideng defines the market. Bosideng is synonymous with down apparel."
"The rapid economic growth and the growing affluence of the people in the PRC bode well for the apparel market. In addition, we see growing momentum as the down apparel market is going through an industry consolidation in which smaller brands are driven out of the market and penetration rate of down apparel in the PRC is relatively low as compared to other developed countries such as Japan and the United States. Given our unrivalled dominance, deep understanding of the PRC down apparel market, strong product design and development capability, extensive distribution network in the PRC and commitment to quality control, we believe Bosideng is well-poised to capture the enormous potential in this lucrative market."
The Hong Kong Public Offering is expected to open at 9:00 am on Thursday, September 27, 2007 and is expected to close at 12:00 noon on Wednesday, October 3, 2007. Allotment results and the Offer Price are expected to be announced or made available on Wednesday, October 10, 2007. Dealing of Shares on the Main Board of the HKSE is expected to commence under stock code 3998 on Thursday, October 11, 2007.
Goldman Sachs (Asia) L.L.C. and Morgan Stanley Asia Limited are the Joint Global Coordinators, Joint Bookrunners, Joint Sponsors and Joint Lead Managers of the Global Offering.
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This document is not an offer for sale of any securities of Bosideng International Holdings Limited in the United States or elsewhere. Any securities offered by Bosideng International Holdings Limited in connection with the transactions described herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"). Securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. There will be no public offering of any securities of Bosideng International Holdings Limited in the United States. This document does not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall there be any sale of securities in any country or jurisdiction in which any such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such country or jurisdiction.
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