Didi Global plans to delist from New York, seek listing in Hong Kong (updated)

DiDi Global

03/12/2021 02:58

(Recasts and writes through)
    SHANGHAI/HONG KONG, Dec 3 (Reuters) - Ride-hailing giant
Didi Global  DIDI.N  said on Friday it will delist from the New
York stock exchange and pursue a listing in Hong Kong,
succumbing to pressure from Chinese regulators concerned about
data security.
    It ran afoul of Chinese authorities by pushing ahead with
its $4.4 billion U.S. IPO in July despite being asked to put it
on hold while a review of its data practices was conducted.
    The powerful Cyberspace Administration of China (CAC) then
quickly ordered app stores to remove 25 mobile apps operated by
Didi and also told the company to stop registering new users,
citing national security and the public interest. Didi remains
under investigation.
    "Following careful research, the company will immediately
start delisting on the New York stock exchange and start
preparations for listing in Hong Kong," Didi said on its
Twitter-like Weibo accounnt.
    It later said in a separate English language statement that
its board had approved the move.
    "The company will organize a shareholders meeting to vote on
the above matter at an appropriate time in the future, following
necessary procedures," it said.
    Sources have told Reuters that Chinese regulators pressed
Didi's top executives to devise a plan https://www.reuters.com/world/china/china-asks-didi-delist-us-security-fears-bloomberg-news-2021-11-26
 to delist from the New York Stock Exchange due to concerns
about data security. 
    "Didi’s plan to delist in the United States and the listing
of Hong Kong stocks I believe will have an obvious impact on
location decisions for large technology stocks' future
listings," said Kenny Ng, securities strategist at Everbright
Sun Hung Kai in Hong Kong. 
    "At the same time, this event makes the market believe that
the current industry supervision of technology stocks in the
mainland will continue, and the decline in the stock prices of
technology stocks listed in Hong Kong today also reflects this
factor."
    Sources have told Reuters that Didi is preparing to relaunch
https://www.reuters.com/technology/exclusive-didi-prepares-relaunch-apps-china-anticipates-probe-will-end-soon-2021-11-11
 its apps in the country by the end of the year in anticipation
that Beijing's cybersecurity investigation into the company
would be wrapped up by then. 
    The CAC did not immediately respond to a request for comment
on Didi's plans to delist from New York.
    Didi made its New York debut on June 30 at $14 per American
Depositary Share, which gave the company a valuation of $67.5
billion on a non-diluted basis. Those share have since slid 44%
until Thursday's close, valuing it at $37.6 billion.
    Shares in Didi investor SoftBank Group Corp  9984.T  fell
more than 2% after the Didi announcement, also hurt by 
Southeast Asia ridehailing giant Grab's  GRAB.O  slump in its
Nasdaq debut.
    SoftBank's Vision Fund owns 21.5% of Didi, followed by Uber
Technologies Inc  UBER.N  with 12.8%, according to a filing in
June by Didi.

 (Reporting by Brenda Goh, Julie Zhu, Alun John and Sayantani
Ghosh; Writing by Sumeet Chatterjee; Editing by Edwina Gibbs)
 ((brenda.goh@thomsonreuters.com; +86 (0) 21 2083 0088; Reuters
Messaging: brenda.goh.thomsonreuters.com@reuters.net))