Shein to pay up to $3.5 billion to some existing investors after valuation plunge

Corporate Action
โดย Reuters·CNHK·Read original
Summary · why it matters

Shein, the Chinese fast-fashion e-commerce giant that has begun the process for an initial public offering in Hong Kong, will pay up to $3.5 billion in cash and stock to some existing investors, nearly double its IPO fundraising target, according to a prospectus published on the 24th. The recipients include entities linked to Boyu Capital, Tiger Global, General Atlantic, Thrive Capital, Mubadala, and Brookfield. These investors hold shares from Shein's late-stage funding rounds and were granted protection clauses that are triggered if the IPO is carried out at a level below the prices paid in previous funding rounds. Shein plans to set its offer price on the 31st and list on September 1, with an indicative range of HK$47.60 to HK$49.50 per share. It will sell about 280 million shares and aims to raise HK$13.86 billion, or $1.77 billion, at the top of the range. At the top of the indicative range, the valuation would be close to $27 billion, below the $60.5 billion from the 2022 Series Pre-D round, the $98.2 billion from the Series D round, and the $64 billion from the 2023 Series D+ round. Shein said that if the IPO price is set at the low end of the indicative range, it may pay up to $2.2 billion in cash under conversion adjustment protection clauses, and will also issue an additional 19.6 million shares at no cost. Separately, it agreed to make payments of about $1.33 billion to holders of Series Pre-D, D, and D+ preferred shares. Of this, about $1.1 billion will be paid in three instalments, plus an estimated $230.4 million accrued by the completion of the IPO, to be paid within 15 business days after the IPO closes. These payments will be funded from its own resources, and holders of Series A, B, C, and C+ preferred shares are not eligible.

Impact on stocks 1

Energy Transition & Power Demand▼ · 1 stocks
Brookfield Corp
BN
▼ NegativeCapitalrelevance

Brookfield is an existing investor in Shein and will receive payments due to valuation drop, but the valuation plunge and IPO at lower price negatively impact its investment value.

Off-coverage companies 5

General AtlanticPrivate▼ Negative
Capitalrelevance

General Atlantic is an existing investor in Shein; the lower IPO valuation and compensation payments reflect a decline in investment value.

Mubadala Investment CompanyPrivate▼ Negative
Capitalrelevance

Mubadala is an existing investor in Shein; the valuation plunge and IPO at lower price negatively impact its investment.

Thrive CapitalPrivate▼ Negative
Capitalrelevance

Thrive Capital is an existing investor in Shein; the valuation plunge and IPO at lower price negatively impact its investment.

Tiger Global Management, LLCPrivate▼ Negative
Capitalrelevance

Shein's valuation plunge triggers protection clauses, paying up to $3.5B to investors like Tiger Global, below prior funding round prices.

博裕资本Private▼ Negative
Capitalrelevance

Boyu Capital is an existing investor in Shein; the valuation plunge and IPO at lower price negatively impact its investment.

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