HONG KONG (Reuters) - Nissin Foods Co Ltd, an instant noodle unit of Nissin Foods Holdings Co Ltd (2897.T), said on Wednesday it aims to raise up to HK$1.13 billion ($145 million) in an initial public offering (IPO), in a rare instance of a Japanese firm listing in Hong Kong.
Nissin Foods Co plans to offer 268.58 million shares in the IPO, of which 10 percent will be earmarked for retail investors, at an indicative range of HK$3.45 to HK$4.21 apiece, the company said in a filing on Wednesday.
The final offer price will be announced on Dec. 8 and trade in the shares is expected to begin on Dec. 11.
The Japanese parent’s stake in Nissin Foods Co will be reduced to 73.89 percent, from 100 percent, on completion of the offering.
Nissin Foods Co, which makes and sells noodle under brands NISSIN and DOLL, ranked fifth-largest instant noodle company in China in terms of retail sales value in 2016, the company said citing consultancy Frost & Sullivan.
The company ranked second in the mainland’s premium instant noodle market in retail sales value, accounting for 19.8 percent of the premium instant noodle market, it added.
Nissin Foods Co also makes and sells frozen food products including dim sum dumplings and noodles, and food and beverage products such as snacks, sauces and mineral water.
Proceeds from the offering will be used to upgrade and expand production facilities, enlarge its distribution network in China and to fund strategic partnerships and acquisitions as it further diversifies its product offering, the company said.
Nomura International and Mizuho Securities are joint bookrunners and joint lead managers of the global offering.
Many niche domestic snack food brands have expanded their pool of millennial customers through interactive online and mobile campaigns that emphasize quality ingredients and production methods, which have helped them outpace traditional leaders such as Tingyi (Cayman Islands) Holding Corp (0322.HK).
Tingyi, the owner of Chinese instant noodle brand Master Kong, said earlier this month that it was facing pressure from China’s changing economic development, rising raw material costs, industrial upgrade and fast-changing consumer demand.
Nissin will join just a handful of Japanese firms listing in Hong Kong. Others include department store operator Aeon Stores Hong Kong Co Ltd (0984.HK) in 1994, Uniqlo parent Fast Retailing (9983.T) (6288.HK) in 2014, and pachinko hall operators Dynam Japan Holdings Co Ltd (6889.HK) in 2012 and Niraku GC Holdings Inc (1245.HK) in 2015.
Reporting by Donny Kwok; Editing by Edwina Gibbs and Christopher Cushing