September 5, 2014 / 12:16 AM / in 3 years

China's largest auto rental company launches up to $468 mln HK IPO-source

HONG KONG, Sept 5 (Reuters) - China Auto Rental Inc, the country’s largest auto rental firm, launched an initial public offering of up to $468 million in Hong Kong on Friday, raising funds to grow its fleet and pay down debt, a source with direct knowledge of the plan said.

The company, backed by private equity firm Warburg Pincus and Hertz Global Holdings Inc, is offering 426 million new shares, the source said, citing details from a term sheet.

The shares are being offered in an indicative range of HK$7.50 to HK$8.50 each, putting the total deal at HK$3.62 billion, said the source, who was not authorized to speak publicly on the IPO plans and declined to be named.

China Auto Rental plans to use 70 percent of the IPO proceeds to expand its fleet. It will buy 45,000 to 60,000 vehicles, adding to the 55,000 cars it had at the end of March, according to its draft IPO prospectus.

The company also said 20 percent of the funds will be used to pay down loans and 10 percent for working capital.

Credit Suisse and Morgan Stanley were hired as joint sponsors of the IPO, with China International Capital Corp (CICC) acting as a joint global coordinator. (1 US dollar = 7.7498 Hong Kong dollar) (Reporting by Elzio Barreto; Editing by Denny Thomas and Paul Tait)

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