By John Revill and Julie Zhu
ZURICH/HONG KONG (Reuters) -Swiss agrichemicals and seeds group Syngenta has withdrawn its application to float on Shanghai’s tech-focused STAR Market and will instead seek a listing on the main board of the Shanghai Stock Exchange, the company said on Thursday.
Syngenta is seeking to rescue its 65-billion-yuan ($9.4-billion) IPO, which hit the buffers after the Shanghai bourse canceled a hearing without providing a reason in late March.
“Syngenta Group has withdrawn its STAR Market IPO application and will immediately apply for a public listing on the main board at the Shanghai Stock Exchange,” the Chinese-owned company said in a statement.
It said it decided to switch focus following China’s recent listing rule changes to more clearly define the roles of different boards.
“We believe Syngenta Group … fits better on the main board,” the company said.
The change was in line with a decision that the main board was meant to support large-scale companies with mature business models and stable earnings performance, it added.
China’s securities watchdog has since February implemented new rules to broaden the registration-based IPO system to the main boards in Shanghai and Shenzhen, homes to many Chinese blue chips, part of efforts to reform the world’s second-biggest stock market.
The new IPO system, designed to simplify listing requirements and improve registration and vetting procedures, was first adopted by the STAR Market and later rolled out to start-up board ChiNext and the Beijing Stock Exchange.
Key to the changes is the so-called registration system, which replaces the previous approval-based IPO system for the main boards in the Shanghai and Shenzhen stock markets, under which companies had to go through strict vetting process by the securities regulator.
Under the new system, stock exchanges are responsible for vetting IPOs with a focus on information disclosure, while the regulator only makes sure listings are in line with national industrial policy.
The Shanghai Stock Exchange said in a statement it fully respected Syngenta’s “independent choice of listing boards and support the listing of large agricultural technology companies”.
The bourse said it would push forward with work on Syngenta’s IPO in a “steady and orderly” way after it submits its application for the main board listing.
The new listing mechanism also sets no administrative restrictions on the issuance price and size of new shares.
“This main board listing will enable Syngenta Group to access more diversified investors and will be conducive for the company’s long-term value,” the company said.
A rival of U.S. company Corteva (NYSE:) and German firms BASF and Bayer (OTC:), Syngenta was bought for $43 billion by ChemChina in 2017 and folded into Sinochem Holdings Corp in 2021.
The company reported its highest ever annual sales and earnings for 2022, with earnings before interest, tax, depreciation and amortisation (EBITDA) up 20%, at $5.6 billion.
The Chinese parent plans to keep a majority stake after the IPO, which is set to be one of the world’s biggest this year and is expected to give Syngenta an enterprise value of about $60 billion.
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