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Asian private equity firm joins AIM to boost visibility

China and India-focused private equity group Origo Sino-India will join AIM to elevate the company’s credibility and visibility in the West.

Origo Sino-India, a Beijing-based investment and consultancy business, will float 25.7 million shares, representing 40 percent of the company, on London’s AIM next week, for an expected price of £10 million (€15 million; $20 million).  The company recently raised £11.8 million from investors and is expected to have a market capitalisation of £32.6 million on admission.

Rynning:will retain a 20 percent stake following float

Origo will list ordinary shares at 50p a share and warrants to subscribe for ordinary shares at 55p a share, which are exercisable over three years, according to a statement.

Following the initial public offering, Origo will have a market capitalisation of £33 million and Chris Rynning, chief executive officer of Origo, will remain the largest single shareholder with a 20 percent stake, which is worth £6.5 million.  The remaining 40 percent will be retained by existing investors and Origo management.

Rynning told PrivateEquityOnline: “We wanted to create liquidity for our shareholders.  It’s also a credibility issue for us.  For us to have walked up the path to take an India and China-focused company public in London lends us credibility and visibility.  This contributes to increased deal flow and we’re attracting interest from Europe and the US.”

Rynning also said the motivation behind the initial public offering was to improve the company’s image to potential employees.  He said there is a scarcity of qualified investment professionals in Beijing, and public company status, liquid stock and competitive benefits would attract talented candidates.

Origo will reinvest the capital gain and will not distribute dividends to the shareholders.  Rynning said Origo has more investment opportunities than capital to deploy and is looking for US and European co-investors.

Origo’s nominated advisor is stockbroker Seymour Pierce, while UK firm Charles Russell is giving legal advice and BDO Stoy Hawyward is providing financial services.

Origo currently has nine companies in its portfolio, some of which are looking for exits in the US and European markets, while some are planning initial public offerings on the London Stock Exchange and NASDAQ.  Origo will commit $110 million to a further 25 later stage Indian companies.

Origo invests in companies worth  £250,000 to £10 million.  Although the group does not have a sector focus, it has invested predominantly in shipping, manufacturing and hospitality sectors.