KKR-backed COFCO Meat plunges 17.5 pct in afternoon trade in HK debut: Reuters

Shares of Chinese pork producer COFCO Meat Holdings Ltd, backed by a private equity group including KKR & Co, plunged in their trading debut on Tuesday, underscoring tepid investor demand for the deal.

COFCO Meat was down 17.5 percent in afternoon trade, after dropping as much as 24 percent earlier, compared with a 1.2 percent gain in the benchmark Hang Seng index.

COFCO Meat raised HK$1.95 billion ($252 million) from a Hong Kong IPO, after pricing shares at the bottom of its indicative range.

China’s state-owned COFCO Corp is the company’s largest shareholder, with other main shareholders including KKR and private equity firms Boyu Capital, Baring Private Equity Asia and Singapore’s Temasek Holdings.

Retail investors bought only 0.4 times the number of shares on offer in the IPO, while the institutional tranche was moderately oversubscribed, COFCO Meat said in a filing on Monday.

COFCO Meat said it would use the proceeds to build new hog farms, develop its sales network and repay bank borrowings.