Prague-based consumer finance lending company Home Credit has announced that it will be pulling out from its planning $1 billion initial public offering (IPO) in Hong Kong. The company, which counts China as its largest market, stated that it decided to shelve the IPO due to the current "market conditions."
Home Credit originally announced its plans to go public in Hong Kong back in July. Around the same time, companies such as Budweiser Brewing Company APAC and ESR Cayman had also announced their intentions of launching an IPO in the city.
Both Budweiser and ESR Cayman later announced that they would be postponing their listings due to "unfavorable market conditions." In September, Budweiser Brewing Company APAC announced that it would be pushing through with its IPO. ESR Cayman followed suit in October, stating that its decision was based on the fact that market sentiments for its listing had improved.
Home Credit Group BV, the parent company of Home Credit, mentioned in a statement on Thursday that it would not be proceeding with its planned Hong Kong IPO. The company did not specify if it had completely canceled its plans or it was merely postponing the listing.
The decision was made just as the company reached the end of the window for it to proceed with the IPO after its filing in July. Analysts have stated that the decision was likely due to the increased concerns in recent weeks over the possible valuation of the listing and the current macroeconomic environment in Hong Kong.
The Czech non-banking financial institution was originally established in 1997. The company offers point-of-sales loans inside shops found in dozens of countries around the world. The loans were primarily offered for consumer goods such as electronics and televisions, but the company has since expanded to offer cash loans and revolving loan products.
Home Credit primarily focuses its business on consumers with little to no credit history in emerging markets across Europe and Asia. This includes countries such as India, China, the Philippines, and Russia. The company entered China in 2007 and was granted a pilot consumer finance license in 2010. As of March this year, Home Credit revealed that more than 60 percent of its outstanding loans are from China.
The company's announcement of its canceled IPO came as the Hang Seng Index fell by 1.5 percent on Thursday. The drop was primarily attributed to growing fears amongst investors that the ongoing trade war between China and the United States may be prolonged.
