HONG KONG - More than a year after China pledged to smoothen the process for offshore listings, firms are reeling from a regulatory logjam that is unlikely to ease soon, and staring at the prospects of sharply lower valuations even as market sentiment improves.
A lack of such deals, as a result of China's regulatory crackdown as well as volatile capital markets and geopolitical tensions over the past couple of years, has resulted in bank layoffs and weighed on returns for private equity funds. In response to Reuters request for comment sent last Thursday, the CSRC said it had always supported domestic companies to lawfully tap both onshore and offshore markets for financing and development purposes.
The approval process has on average delayed an offshore offering by two to three months, with time needed for all regulatory clearances totalling at least eight to nine months, a senior banker at a foreign bank said. JD Industrials, a VIE-structured company, whose Hong Kong listing application was filed more than a year ago, is still awaiting approval pending supplementary materials, a regulatory disclosure shows.