CICC Assists Country Garden Service to Conduct the Placing of New Shares and Issuing of Convertible Bonds on HKEx

2021-05-26Corporate News

On May 24, 2021, Country Garden Services Holdings Company Limited (“the Company” or “Country Garden Services”, 6098.HK) has successfully completed the pricing of new shares and convertible bonds on the Hong Kong Stock Exchange. The total gross proceeds are estimated to be approximately HK$15.53 billion (US$2.00 billion); the gross proceeds from new shares and convertible bonds are around HK$10.49 billion (US$1.35 billion) and HK$5.04 billion (US$0.65 billion), respectively. CICC acted as Joint Placing Agent, Joint Global Coordinator and Joint Bookrunner.

The offering is the largest ever in the property management industry in terms of the Hong Kong refinancing offering size of placing new shares and issuing convertible bonds, as well as the largest refinancing since the Company’s listing in terms of offering size.

Country Garden Services was founded in 1992. After 29 years of steady development, the Company’s business covers residential properties, commercial properties, office buildings, multi-functional complex buildings, government and other public facilities, industrial parks, highway service stations, parks, schools and so on. As of the end of FY2020, the Company’s property projects have reached 3,277, covering more than 360 cities, and achieving management area of about 821 million square meters.

Country Garden Services has achieved outstanding financial growth. In FY2018, FY2019 and FY2020, the Company generated revenue of RMB4.68 billion, RMB9.65 billion and RMB15.60 billion, respectively, and net profit of RMB0.92 billion, RMB1.67 billion and RMB2.69 billion, respectively. As at the end of FY2020, the Company recorded total assets of RMB31.20 billion, total liabilities of RMB15.05 billion and shareholders’ equity of RMB16.16 billion, of which RMB14.57 billion was attributed to owners of the Company.
The offering has caught the attention of large number of investors. The Company intends to use the net proceeds for investments in potential future merger and acquisition projects relating to the principal activities of the Group, expansion in respect of new businesses including commercial management services, asset management services and life services, working capital and general corporate purposes in order to catch the market trends, optimize the business structure and further improve the business performance. As the Joint Placing Agent, Joint Global Coordinator and Joint Bookrunner, CICC successfully conducted the related work and contributed to the success of the Company’s refinancing.

Based on the quality of the Company and the excellent capital market strategies, the transaction was highly pursued by investors. Both the placement and convertible bonds achieved excess coverage within 1 hour of the book opening, with the active participation of various institutional investors around the world including the existing shareholders, top long-term funds, well-known Chinese-funded entities, active multi-strategy funds and convertible bond funds. The final offering scale increased more than 30% compared to the proposed scale at the beginning of the market promotion. This transaction is the second refinancing that CICC assisted Country Garden Services to complete, and it is also the first cooperation in the area of convertible bond transaction. With the excellent and professional execution and underwriting abilities, CICC cooperated with the Company to complete the preparation process in a short time under the circumstance of volatile capital market, attracted the active participation of various well-known investors, helped the Company with grasping the golden development opportunities of the industry, accelerating upgrade and iteration by leveraging the capital market power, and achieving further development and breakthroughs in different emerging areas including stock assets operation, community services and space services.

As an investment bank with Chinese roots and international reach, rich capital market experiences, and seamless integration of domestic and foreign business platforms, CICC will continue to provide best and tailored capital market solutions for Country Garden Services and help with the Company's long-term strategic development.