Oct. 12, 2021
The Shanghai Stock Exchange has put the brakes on scores of upcoming initial public offerings, including Syngenta’s planned $10 billion flotation, slated to be the world’s largest this year, in a move it blamed on outdated financial data.
Though it’s not unusual for Chinese regulators to seek updated financial information from IPO candidates at the start of each quarter, the move - affecting over $21 billion in targeted fund-raising - has drawn market attention amid Beijing’s tighter scrutiny of Chinese tech firms.
It also follows laptop maker Lenovo Group’s withdrawal on Friday of its application for a $1.5 billion listing on Shanghai’s STAR market, days after it had been accepted. It said on Sunday it had done so because of the possibility of the validity of financial information in its prospectus lapsing during the application’s vetting.
The Shanghai bourse said in disclosures that it had suspended the review of 57 IPO applications, including Syngenta’s, because financial materials the companies submitted needed to be updated.
Syngenta declined to comment but a person familiar with the matter said on Monday that the Chinese-owned agrochemical company filed the updated documents on Oct. 8, a day after a week-long national holiday in China.
The exchange was now likely having to work through a backlog of documents before updating its website, people familiar with the situation said.
The 57 companies were looking to raise more than 138 billion yuan ($21 billion) in total, according to Reuters calculations based on their prospectus filings.
Syngenta’s application to list on Shanghai’s STAR Market was accepted at the start of July..
Financial reports contained in a company’s IPO prospectus are valid up to six months, according to China’s securities regulator. Syngenta’s application featured financial information up to March-end, meaning it was outdated after Sept. 30.
The Switzerland-based seeds and crop protection giant was bought in 2017 for $43 billion by ChemChina, which was folded into Sinochem Holdings Corp this year.
Following the flotation, the producer of pesticides and seeds is likely to be valued around $60 billion including debt, or $50 billion without, sources previously told Reuters.
ChemChina is also considering a secondary listing for Syngenta that could take place less than a year after its Shanghai debut, with exchanges in Zurich, London and New York among the options being examined, sources have said.
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