Somerley Capital Holdings Limited (“Somerley Capital”, together with its subsidiaries, the “Group”), which principally engages in providing corporate finance advisory services in Hong Kong, today announced the details of the proposed listing of its shares (the “Listing”) on the Growth Enterprise Market (“GEM”) of The Stock Exchange of Hong Kong Limited (“SEHK”).
Somerley Capital Limited, its indirect wholly-owned subsidiary of Somerley Capital, is one of the most active financial advisers, based on certain league table rankings published by Mergermarket and Thomson Reuters for the years 2015 and 2016.
Offering Details
Somerley Capital is offering 35,000,000 Shares at the Offer Price for subscription by the public in Hong Kong (the “Hong Kong Public Offering”).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as to institutional, professional investors or other investors in Hong Kong.
The estimated net proceeds from the Hong Kong Public Offering, assuming an Offer Price of HK$2.00, being the mid-point of the indicative Offer Price range of HK$1.70 to HK$2.30, are expected to be approximately HK$54.6 million, after deduction of the professional fees, underwriting commissions and other fees payable by the Group in connection with the Hong Kong Public Offering and the Listing.
The Hong Kong Public Offering commenced at 9:00 a.m. today (15 March 2017), and will close at 12:00 noon on 20 March 2017 (Monday).
The final Offer Price, the level of applications of the Public Offer and the basis of allocation of the Public Offer Shares are expected to be announced on 27 March 2017 (Monday).
Dealings in the Shares on the SEHK will commence at 9:00 a.m. on 28 March 2017 (Tuesday) under the stock code 8439. The Shares will be traded in board lots of 2,000 Shares.
Somerley Capital Limited and Halcyon Capital Limited are the Joint Sponsors. Halcyon Securities Limited, GF Securities (Hong Kong) Brokerage Limited and Haitong International Securities Company Limited are the Joint Lead Managers.
Investment Highlights
During the Track Record Period, Somerley Capital represented over 200 clients (including Hutchison Whampoa Limited (0013.hk), New World China Land Limited (0917.hk), CITIC Pacific Limited (subsequently renamed to CITIC Limited, 0267.hk), China Overseas Land & Investment Ltd. (0688.hk) etc.).
The Directors believe that actively participating in the corporate finance market and successful implementation of transactions, the results of which are usually publicly announced, is the best background for obtaining further business.
The Group recognises that market reputation and clients’ confidence in its services are critical to its success, enabling the Group to continue to obtain new business and referrals from its existing clients to secure new mandates.
The Group has built up significant contacts with Hong Kong listed companies and their major shareholders. During the Track Record Period, out of the 166 clients of the Group’s financial adviser and independent financial adviser engagements, around 45% were “repeat clients”.
Experienced teams of professionals
As at the Latest Practicable Date, the Group had a total of 35 staff of which 9 were Responsible Officers and 14 were Licensed Representatives.
The Directors believe that an important element to the success of the Group in a competitive environment is its experienced teams of professionals. All of the Responsible Officers have more than 13 years of relevant experience, and most of them have been with the Group (and its predecessor) for over 8 years.
Simple and independent shareholding structure
A simple shareholding structure assists the Group in obtaining engagements, particularly, as regards acting as independent financial adviser or compliance adviser.
A simple structure facilitates such matters as independence checks during the deal approval and acceptance process so that Somerley Capital can commence potential independent financial advisory work promptly.
Specialised business
Somerley Capital is a corporate finance specialist and does not carry out businesses such as lending, private banking or stockbroking. The Directors believe that Somerley Capital is recognised as a specialist in its field, focusing on offering corporate finance advice and services to its clients, without attempting to “cross sell” other services.
Growth Strategies
Moving forward, the Group will continue to strengthen its professional teams to help increase contacts with potential new clients, initiate new ideas to assist clients in achieving their objectives in corporate finance, provide clients with practical solutions in structuring corporate finance transactions and ensure the detailed execution of corporate finance transactions.
Additionally, the Group will increase its emphasis on IPO activities. With a sponsor licence and three registered Principals, the Directors intend to seek opportunities to sponsor companies applying for listing in Hong Kong.
The Group intends to recruit additional staff with experience in equity capital market operations, to be better placed to participate in fund raising activities and, which complement the Group’s existing corporate finance advisory services.
In view of signs of rising pressure in credit markets and other difficulties giving rise to suspension of trading, the Group will devote more effort and resources to expand advisory work for distressed companies.
Use of Net Proceeds
Assuming an Offer Price per Offer Share of HK$2.00 (being the mid-point of the indicative Offer Price range), the estimated net proceeds are expected to be approximately HK$54.6 million, intended to be applied for the following purposes:
Uses / Percentage
To develop the Group’s equity capital markets business and for supporting its underwriting business: 43.2%; To expand the office(s) of the Group to cope with the expansion of corporate finance advisory business: 19.6%; To expand the Group’s corporate finance advisory business: 16.1%; To enhance the information technology capability of the Group: 13.8%; To serve as the general working capital of the Group: 7.3 %. – BusinessNewsAsia.com