April 2 Security software maker Cheetah Mobile
Inc, a unit of Chinese software company Kingsoft Corp Ltd
, filed with U.S. regulators on Wednesday to raise
about $300 million in an initial public offering of American
Beijing-based Cheetah, formerly known as Kingsoft Internet
Software Holdings Ltd, told the U.S Securities and Exchange
Commission in a preliminary prospectus that Morgan Stanley,
J.P.Morgan, Credit Suisse and Macquarie Capital were
underwriting the IPO. (r.reuters.com/dyr28v)
The filing did not reveal how many shares the company
planned to sell or their expected price.
Kingsoft Corp, which makes entertainment, internet security
and office software, applied to the Hong Kong Stock Exchange In
January for permission to spin off its security software
Kingsoft Corp, which holds about 54 percent of Cheetah, has
proposed a dual-class structure that would allow it to retain
control and continue to consolidate the unit's financial results
after the IPO.
The U.S. market affords Chinese companies options not
available in Hong Kong, such as dual-class structures and the
ability to list without having turned a profit. It also offers
far more liquidity than the newly reopened mainland China IPO
Cheetah, like a number of other Chinese companies listing in
the United States, relies on a little-tested legal structure
called "variable interest entity" (VIE) that gives an investor
economic interest but no ownership.
The structure helps companies bypass Chinese government bans
on foreign ownership in some business sectors.
Cheetah intends to list its common stock on the New York
Stock Exchange but did not specify the symbol under which it
Net proceeds from the offering would be used to strengthen
marketing and for other general corporate purposes, the company
said in the filing.
The company reported net income of $10.24 million on revenue
of $123.87 million in 2013.
The amount of money a company says it plans to raise in its
first IPO filings is used to calculate registration fees. The
final size of the IPO could be different.
(Reporting by Avik Das in Bangalore; Editing by Don Sebastian)