Asian food processing giant Wilmar International (SGX: F34) plans to raise as much as USD 2 billion by selling shares in its Chinese unit in what could be the biggest mainland initial public offering this year. The proposed China listing may unlock shareholder value for Wilmar.
Yihai Kerry Arawana Holdings Co is aiming to raise as much as 13.87 billion yuan by selling a stake of at least 10% on the Shenzhen stock exchange, according to a preliminary prospectus. The proceeds of this listing will be used to finance 19 new projects in China, including soybean crushing units, flour mills and animal feed plants.
Wilmar remains confident in China even though the swine flu outbreak has reduced demand for animal feed.
Yihai Kerry Arawana, which has 62 production bases in China, is the biggest competitor to state-owned COFCO Group. Arawana is Wilmar’s flagship brand in Asia. It has been the leading edible oil brand in China since the 1990s and has the largest share in the packeted consumer edible oil market.
Yihai Kerry Arawana posted revenue of 167 billion yuan (USD 24.3 billion) in 2018 with a net profit of 5.52 billion yuan (USD 0.8 billion), according to the prospectus. In 2018, Wilmar’s full-year revenue was USD 44.5 billion and net profit was USD 1.13 billion. It can be seen that more than half of Wilmar’s business is attributable to Yihai Kerry Arawana.