China-based car rental service China Auto Rental (CAR) will seek up to $400m in an initial public offering in Hong Kong, according to Netease Tech.
The IPO filing states that US-based automotive rental company Hertz owns a 19% share of CAR, down slightly from the 20% stake it bought in September 2013 for an undisclosed sum.
The largest shareholder in CAR is investment vehicle Grand Union Management, while private equity firm Warburg Pincus, which invested $200m in 2012, holds 23.1% and financial services company Cititrust 15.8%.
CAR claims to be China’s largest car rental provider, operating in 69 major cities and 52 airports as of the end of March. It previously attempted a $138m IPO in the US in 2012, but was unsuccessful amid concerns in the US about fraudulent accounting among Chinese companies.
The filing stated that approximately 70% of the proceeds from the offering would be used to expand CAR’s fleet, and the business plans to buy between 45,000 and 60,000 new vehicles on a financing structure of 30-40% equity and 60-70% debt per vehicle.
About 20% will be earmarked for repaying outstanding bank loans, while 10% is set to be held back for working capital and other general corporate purposes.