Shengmu Organic Milk announces IPO

The Chinese milk producer based in Inner Mongolia has announced plans to float on the Hong Kong Stock Exchange.

China Shengmu Organic Milk, a company which produces organic milk in Inner Mongolia, has announced it will float on the Hong Kong Stock Exchange on 14 July.

The firm set out the plan in an IPO prospectus, which was released on 30 June.

Shengmu plans to offer a little over 444 million shares in a Global and Hong Kong IPO. Shares will be priced at HK$2.39-$2.95 ($0.31-0.39; €0.23-0.28) per share.

Shengmu, which has 54.2 percent of the raw organic milk market share in China, is aiming to raise HK$1.32 billion from the IPO at the top end of the share price.

The proceeds of the float will go towards constructing six new dairy farms and acquiring 15,000 dairy cows among other operational and expansion costs.

The firm has entered into a cornerstone investor agreement with Bao Hua Investments, a company wholly owned by COFCO Agricultural Industrial Equity Investment Fund. Bao Hua Investments has agreed to subscribe to $30 million shares.

ABC International, BOCOM International, CICC and Goldman Sachs are jointly running the book.

Interested investors have until 7 July 2014 to apply for shares.