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eHi car services contemplates re-entry into US capital market with potential $300M IPO!

eHi car services contemplates re-entry into US capital market

eHi Car Services Ltd., a company headquartered in Shanghai, China, is currently mulling over a potential return to the US capital market through an initial public offering (IPO), with expectations to raise approximately $300 million, as shared by individuals familiar with the matter.

Previously, in 2019, eHi underwent delisting from the New York Stock Exchange following a significant $850 million take-private deal. Now, the company is actively engaged with prominent financial entities including China International Capital Corp., Deutsche Bank AG, JPMorgan Chase & Co., and UBS Group AG in regards to the envisaged share sale.

It's been suggested that eHi might decide to file confidentially for the listing once it secures the requisite regulatory approvals in China.

While these discussions are still in their nascent stages, finer details such as the exact size of the offering and the timeline for its execution remain subject to potential adjustments, according to the sources privy to the matter.

Notably, when approached for comments, representatives from CICC, Deutsche Bank, JPMorgan, and UBS opted not to provide any statements, while eHi itself did not respond to inquiries.

Following the report from Bloomberg News, which highlighted eHi's potential IPO plans, the company's dollar bond due September 2026 experienced a reversal in fortunes on Monday.

Data compiled by Bloomberg indicates that the bond managed to recover from earlier losses, gaining 2.5 cents on the dollar to reach 80.8 cents as of 3:24 pm in Hong Kong. This surge brought the bond's value to its highest level since March 2022.

Should eHi indeed proceed with its IPO, it would mark a noteworthy instance of a Chinese company re-entering the US capital market, a move that has become relatively rare. This shift in sentiment comes against the backdrop of heightened tensions between Beijing and Washington.

During that period, several Chinese firms listed on US exchanges, such as Alibaba Group Holding Ltd. and Baidu Inc., opted for secondary listings in Hong Kong as a safeguard against potential delisting risks. Some companies even chose to entirely delist from US exchanges.

Established in 2006, eHi has carved out a niche for itself in the Chinese market, primarily offering car rentals and chauffeur services. Its operations span across more than 500 cities, boasting a fleet of over 80,000 vehicles.

The company's initial foray into the US capital market occurred in November 2014 when it successfully raised $120 million through an IPO.

In 2019, eHi underwent a significant ownership transition when a consortium led by its Chairman and Chief Executive Officer, Ray Zhang, orchestrated a buyout of the company's shareholders.

This consortium included notable private equity firms such as Baring Private Equity Asia Ltd., MBK Partners Ltd., and Ocean Link Partners Ltd. Subsequently, eHi explored the possibility of an IPO in Hong Kong with the aim of raising approximately $1 billion, as per reports from Bloomberg News in 2021.



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