Chailease raises $206 million from debut GDR

The deal comes on the back of a 116% rally in its Taiwan-listed stock in the nine months since the IPO.
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Chailease listed in Taipei in December
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<div style="text-align: left;"> Chailease listed in Taipei in December </div>

Chailease Holding, a Taipei-listed financing and leasing company, has raised $206.2 million from its first-ever sale of global depositary receipts. The deal was launched and completed after the market closed yesterday and is the second GDR out of Taiwan in less than a week. Last Thursday, Win Semiconductors completed a GDR sale that raised $158 million.

However, while the Win Semiconductors transaction was fully marketed with the bookbuilding coming on the back of a one-week roadshow, Chailease chose to do its deal on an accelerated basis with no marketing. As a result, it didn’t have to deal with a live share price.

But, having announced its intention to do a GDR about a month-and-a-half ago, Chailease didn’t just hit the market out of the blue. And the company also did two non-deal roadshows in September to visit investors in Hong Kong/Singapore and London/US respectively.

According to sources, a lot of the demand came from investors with a good understanding of Chailease’s business, who either met with the management during those roadshows, or who had done the work beforehand. One source noted that some international investors who already own the company’s common shares that are listed in Taiwan also participated in the deal.

Chailease was previously listed in Singapore, but delisted from there a while back and re-listed in Taipei in December last year after raising NT$708.8 million ($24 million) from an IPO that was led by Capital Securities. Like most other Taiwan listings, this was a largely domestic affair, and the GDR is really the first opportunity for international accounts to make a sizeable investment in the company since the re-listing.

However, they had to be prepared to pay up as Chailease’s share price has rallied 116% since the IPO, which was done at a price of NT$25 per share. The stock hit a record high of NT$56 on September 26.

Last night the company was offering to sell 24 million GDRs, which represented 120 million common shares, at a price that translated into NT$50.30 to 51.60 per common share. This equalled a discount of 4.4% to 6.9% versus yesterday’s close of NT$54.

The price was fixed at the maximum discount of 6.9%, resulting in a price of $8.59 for each GDR, or N$50.30 per common share.

The GDRs were all backed by new shares, which accounted for about 13% of the enlarged share capital. The company is using the money to repay existing bank loans and for investments into its operating subsidiaries.

The deal was covered in less than two hours and when the order books closed at 7.30pm Hong Kong time, it was said to be well covered with participation from close to 35 investors. The buyers included global long-only funds, high-net-worth investors and some hedge funds that came in with quite chunky orders, the sources said. The majority of the demand came from Asia, complemented by some interest from Europe and the US.

Chailease provides a variety of financing services, primarily to small and medium-size enterprises in Taiwan and selected international markets, including the United States, Thailand, China and Vietnam. The deal came a day after the company released revenue data for September, which beat the consensus estimates and showed that with three months to go, the company has already generated 87% of the 2012 revenue forecast.

J.P. Morgan was the global coordinator for the issue as well as a joint bookrunner together with Morgan Stanley.

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