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Liam O’Callaghan

BY LIAM O’CALLAGHAN

Goodfarmer moves closer to IPO

Chinese fresh produce company Goodfarmer has moved closer to launching an IPO after receiving approval from the China Securities Regulatory Commission

Goodfarmer moves closer to IPO

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Goodfarmer hopes to raise Rmb1.1bn (US$160m) in capital when it launches an IPO of A-shares on the Shanghai Stock Exchange.

In one of the major steps towards the IPO, the Chinese fresh produce company had its IPO prospectus accepted by the China Securities Regulatory Commission (CSRC).

The proposed offering is expected to be limited to 64m shares but there is no current timeline for when the IPO will be launched.

According to the prospectus, Goodfarmer plans to use the capital it raises from the IPO for five projects, the largest of which is a ‘modern distribution network construction project’.

The project will upgrade the company’s distribution network and facilities across China and will draw around 55 per cent of the total fundraising.

The company said it needs to invest in its distribution network as it is currently near capacity.

Its 24 distribution centres, 11 of which have banana fruit ripening facilities, are at 80 per cent capacity with eight at close to or full capacity. Its refrigerated space at the centres is also at more than 70 per cent capacity.

As for the remaining capital, Rmb117m (US$17m) will be used to build a new distribution centre in Shanghai, Rmb208m (US$30m) will be used for refrigeration equipment, Rmb83m (US$12m) for a research and development centre and upgrades to the company headquarters and Rmb70m (US$10m) to be split between marketing and cash reserves.

 

 

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