Ping An’s associate OneConnect expects $232.7m in net proceeds from US IPO

Maria Nikolova

These estimates are based upon an assumed initial public offering price of US$9.50 per ADS.

OneConnect Financial Technology Co., Ltd., an associate of Ping An Insurance (Group) Company of China, Ltd., has published more details about the ADS listing in the United States.

OneConnect, a major technology-as-a-service platform for financial institutions in China, expects the number of ADSs to be offered in its initial public offering to be 26,000,000 (or 29,900,000 if the underwriters exercise their overallotment option in full) and that the offering price per ADS will be between US$9.00 and US$10.00.

OneConnect estimates that it will receive net proceeds from this offering of approximately US$232.7 million, or approximately US$268.2 million if the underwriters exercise their over-allotment options in full. These estimates are based upon an assumed initial public offering price of US$9.50 per ADS (the mid-point of the price range). A US$1.00 increase (decrease) in the assumed initial public offering price of US$9.50 per ADS would increase (decrease) the net proceeds to the company from this offering by US$24.9 million, or US$28.6 million if the underwriters exercise their option to purchase additional ADSs in full.

The company plans to use the net proceeds of this offering as follows:

  • approximately US$93.1 million for enhancement of its platform and technology capabilities;
  • approximately US$34.9 million for international expansion and strategic investments;
  • approximately US$23.3 million for sales and marketing activities to enhance its brand and acquire customers; and
  • the balance for general corporate purposes.

Earlier this week, OneConnect has been approved to list its ADSs on the New York Stock Exchange under the symbol “OCFT.” These ADSs and shares will not be listed on any other stock exchange or traded on any automated quotation system.

Ping An Overseas, a subsidiary of Ping An Group, the principal shareholder of OneConnect, has indicated an interest in purchasing up to US$100 million worth of the ADSs in the offering, at the initial public offering price and on the same terms as the other ADSs being offered. Assuming an initial public offering price of US$9.50 per ADS, which is the mid-point of the estimated offering price range, the number of ADSs to be purchased by a subsidiary of Ping An Overseas would be up to 10,526,315 ADSs, or approximately 40.5% of the ADSs in the offering.

However, given that this indication of interest is not a binding agreement or commitment to purchase, OneConnect and the underwriters are currently under no obligation to sell ADSs to Ping An Overseas and Ping An Overseas could determine to purchase more, fewer or no ADSs in this offering.

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