The company would have been the second IPO by a Chinese company after the weak debut last month of Vipshop Holdings, an online fashion retailer in China, which had priced its shares much lower than the indicative range.
The delay of China Auto Rental indicates the investing community’s concerns on the corporate governance of privately-owned Chinese companies. Investors are cautious to invest in Chinese IPOs amid volatile conditions.
China Auto was seeking to raise as much as USD137.5 million by offering 11 million American depositary receipts. The auto rental firm was planning to use the proceeds to fund vehicle acquisitions and for debt repayments.
With a network of 520 service locations, China Auto has a rental fleet of about 26,000 vehicles, growing rapidly from only 692 vehicles by the end of 2009. The fleet is about four times that of the second largest car rental company in China as of end-2011, according to China Auto’s prospectus citing German consultancy firm Roland Berger.
The company posted net losses of 3.2 million renminbi, 43.3 million renminbi and 151.4 million renminbi for the years 2009, 2010 and 2011 respectively. The losses, however, came at the back of increasing revenue, which has grown from 54 million renminbi in 2009 to 143 million renminbi in 2010 and 775.8 million renminbi in 2011.
Bank of America Merrill Lynch, J.P. Morgan and Morgan Stanley were the joint bookrunners.
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Its U.K initial public offering after failing to draw enough investors demand.The Cars Rentals in UK is that kind of business if you deal every person nicely.
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