Sun art aims to raise $1.1b through IPO

Sun Art Retail Group, China's largest hypermarket operator, may raise as much as HK$8.2 billion ($1.1 billion/Dh3.8 billion) in a Hong Kong initial public offering. The Shanghai-based company will sell 1.14 billion new shares for HK$5.65 to HK$7.20 each, according to a prospectus distributed to reporters yesterday. Half of the IPO proceeds will be spent opening new stores and the rest will mainly be used to pay back loans and refurbish existing properties. "We will strive to further strengthen our market position by continuously expanding our retail network," Bruno Mercier, chief executive officer of Sun Art, said in a statement. At least six companies withdrew or postponed Hong Kong initial offerings in June as the benchmark Hang Seng Index sank to a nine-month low. Prada SpA and Samsonite International SA, which both started trading in Hong Kong last month, sold shares at the low end of the price range. Sun Art aims to benefit from rising consumer spending in China as the nation's economy is forecast to expand 9.5 per cent in 2011, according to the median estimate of 11 economists tracked by Bloomberg. Retail-sales growth slowed to 16.9 per cent in May, less than the average of the past five years, the Beijing-based statistics bureau said on June 14. China's hypermarket industry, large retailers that sell groceries and goods from clothing to household appliances, may grow at 15 per cent annually in the next five years, Mercier said.