Chinese Firm Dongfang Modern Uses NZ Equity Crowdfunding To Top Up Aussie IPO

Alexander PR In The Media

tvnz-breakfast-visits-botany-town-centres-community-gardenChinese fruit farmer Dongfang Modern has launched an equity crowdfunding campaign in New Zealand to top up funds it is raising through an initial public offering (IPO) in Australia.

The arrangement is unusual in that equity crowdfunding is more commonly promoted as an alternative financing mechanism for companies that don’t want the red tape that goes with a sharemarket listing.

Britain’s Telegraph reported that French wine-maker Domaine Chanzy was the first use equity crowdfunding to help achieve a sharemarket listing when it used the technique to float on Britain’s junior AIM sharemarket in February.

Ganzhou-based Dongfang produces tangerines, navel oranges, pomelos and camellia fruits.

It is in the final stages of seeking to raise between A$39 million ($43.6 million) and A$50m through a listing on the ASX.

That offer was original due to have closed on Friday, but has been extended to August 17.

Equity crowdfunding platform Equitise said Dongfang had raised the minimum A$39m from the float but New Zealand retail investors would be able to apply for up to NZ$2m of the shares that might still be available, through its website.

Equitise is one of seven crowdfunding platforms that have been licensed by New Zealand’s Financial Markets Authority to help companies issue shares direct to the public.

Dongfang said it planned to use the raised funds to acquire additional camellia plantations.

Reuters reported Dongfang was one of several Chinese firms that were planning to list in Australia to avoid lengthy waits and market volatility in China.

But Reuters reported that of 38 China-based companies to list in Australia since 1996, only five were trading at or over their issue price.

Melbourne-based equity strategist Danial Moradi said retail investors needed to consider language barriers and the fact businesses were run differently in China.

Equitise country manager Will Mahon-Heap said the company had a firm allocation of $440,000 of shares from the IPO to offer New Zealand investors.

Those shares would be of the same class as those issued through Dongfang’s formal sharemarket prospectus and would also be tradeable on the ASX.

But as they were priced at NZ$1.10 rather than A$1, they would be offered at a slight discount, based on the current exchange rate.

The total amount of funds Dongfang would raise through the IPO would remain capped at A$50m, meaning the equity crowdfunding campaign would displace shares that might otherwise have been issued through its IPO prospectus.

Dongfang was keen to get Kiwi investors to broaden its shareholder base, Mahon-Heap said.

Original article by Stuff.