Kingsoft IPO raises $510 mln, in first China IPO in U.S. since virus outbreak (updated)

Kingsoft

08/05/2020 05:26

(Adds company statement and deal details)
    By Scott Murdoch, Echo Wang and Joshua Franklin
    HONG KONG, May 8 (Reuters) - Chinese cloud computing company
Kingsoft Cloud Holdings Ltd  KC.O  raised $510 million in its
U.S initial public offering, the first Chinese company to list
in the United States since the coronavirus pandemic outbreak
sent markets tumbling.       
    The cloud service provider had planned to sell 25 million
shares but increased the size of the deal to 30 million on
Friday on the back of better than expected demand from
shareholders, parent company Kingsoft Corp  3888.HK  said in a
statement on Friday.
    The deal represented 13.9% of the company's issued capital
and was priced at $17 per share, in the middle of its expected
range, valuing the Xiaomi-backed group at $3.7 billion.  
    Loss-making Kingsoft offers cloud infrastructure as well as
enterprise cloud and artificial intelligence services.
    Cloud computing has so far been one of the sectors boosted
by the novel coronavirus outbreak as it drives more businesses
to operate digitally and rely on cloud computing.
    The value of the company will rise if a so called
'greenshoe' option is exercised and an extra 4.5 million shares
are sold within the next 30 days by the banks which underwrote
the deal.
    Existing shareholders Kingsoft Group, Xiaomi and Carmignac
Gestion anchored the IPO, with Kingsoft buying up to $25 million
of the stock offered, and Xiaomi and Carmignac buying up to $50
million each, Kingsoft said.
    Kingsoft is the first major U.S. IPO by a company that is
neither a biotechnology firm nor special purpose acquisition
company (SPAC) since Canadian waste management company GFL
Environmental in early March. Biotech and SPAC IPOs are
typically immune to broader market swings.
    The IPO was also the first gauge of U.S. investor demand for
Chinese companies going public in New York after a fraud scandal
sent shares in Chinese coffee chain Luckin Coffee  LK.O  into
freefall last month.  urn:newsml:reuters.com:*:nL4N2BR218
    The company is due to start trading on the Nasdaq stock
exchange on Friday under the symbol "KC."
    JPMorgan, UBS, Credit Suisse and CICC led the deal.

 (Reporting by Scott Murdoch in Hong Kong, Joshua Franklin and
Echo Wang in New York; Editing by Muralikumar Anantharaman and
Lincoln Feast.)
 ((Scott.Murdoch@thomsonreuters.com;))