Huobi plans a backdoor IPO after acquiring a controlling stake in Hong Kong based electronics manufacturer Patronics Holdings.
September 13, 2019, | AtoZ Markets – Cryptocurrency exchange platform Huobi appears to be listed in Hong Kong Stock Exchange in the form of Initial Public Offering (IPO), as per the document which has been shared with the Hong Kong Stock Exchange (HKEX).
According to the filing that had been posted on September 10, 2019, Hong Kong’s listed electronics firm Pantronics Holdings Limited, which was acquired by Huobi in August 2018 will be changing its company name to Huobi Technology Holdings Limited
Huobi exchange acquisition with Pantronics
Pantronics had transferred over 221 million ordinary shares to the Huobi Group at the time of acquisition. After that, the firm became the majority shareholder in Pantronics after getting $77 million funding and with more than 73% stocks in the firm.
The tie-up between the two firms might provide Huobi an opportunity to perform a reverse takeover, which would then allow the crypto exchange to go public in Hong Kong.
The takeover might be subject to stricter regulations on backdoor IPOs, which are being developed by the Hong Kong Stock Exchange (HKEX). HKEX also mentioned that it would update its regulatory guidelines by October 1, 2019. It means that this will make reverse takeovers more difficult for firms that acquire Hong Kong-based publicly listed companies from different industries.
Tongcheng electronics is a holding subsidiary of Huobi global. This is because Huobi owns 65.24% of Tongcheng shares and is the largest controlling shareholder. The actual acquisition took place on August 27, 2018.
Huobi and Tongcheng joint announcement
Hong Kong Stock Exchange revealed that major shareholders of Tongcheng is listed on the stock exchange mainboard. It already completed the transfer of 73.73% and 6.8% to Li Lin, Chairman of the Fire Capital Group, and Teng Rongsong, Chairman of the Fission Capital respectively. This step effectively put Huobi group in charge of Tongcheng electronics.
Huobi and Tongcheng subsequently issued a joint announcement that Trinity Gate had completed the acquisition of a total of 216 mln shares of the sale of Tongcheng. Notably, Trinity Gate is a global partner of Tongcheng electronics. These shares accounted for approximately 71.67% of the issued share capital of the company. The shares option agreement got settled on the 5th of October 2018. Accordingly, outstanding considerations for share options paid by Trinity gate to the seller of the share options.
Other major players in the crypto industry are also considering going public in other jurisdictions, after facing challenges in Hong Kong.
Chinese mining giant Bitmain’s IPO in Hong Kong was unsuccessful, as it was allowed to expire. The company’s management may now be looking to enter the US markets.
Canaan Creative, another crypto mining firm, also reportedly filed an IPO in the US after a failed attempt in Hong Kong.
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