<article>Chinese steel trading website Zhaogang.com Inc. is dropping plans to use a dual-class share structure in its Hong Kong initial public offering, people with knowledge of the matter said.</article>

Chinese steel trading website Zhaogang.com Inc. is dropping plans to use a dual-class share structure in its Hong Kong initial public offering, people with knowledge of the matter said.
Zhaogang.com plans to proceed with a regular IPO, selling stock that has the same voting rights as that held by company founders, according to the people. It will work to revise its listing documents and aims to launch the share sale by the end of this year, the people said, asking not to be identified because the information is private.
The Shanghai-based company is abandoning the dual-class setup in part so that it will have more flexibility on the valuation it approaches investors with, the people said. A company that wants to conduct a Hong Kong IPO with a weighted voting rights structure needs to achieve a market capitalization of at least HK$10 billion ($1.3 billion) at the time of the listing, according to the city’s listing rules.
Zhaogang.com was one of four firms to apply so far for a Hong Kong IPO under new rules for innovative tech firms, which allow weighted voting rights that can give company founders and early investors outsized control. Bourse operator Hong Kong Exchanges &amp; Clearing Ltd. relaxed its requirements in April to allow such structures as it seeks to compete with New York for listings of fast-growing Chinese startups.
The setup has been criticized by some money managers, who say it makes protecting minority investors’ interests more difficult. Since the rules were introduced, IPOs from Chinese smartphone maker Xiaomi Corp. and food review and delivery giant Meituan Dianping have raised $9.7 billion using the structure. Cryptocurrency miner Bitmain Technologies Holding Co. filed a listing application in September under the rules.
A representative for Zhaogang.com declined to comment.
Bloomberg

Zhaogang.com plans to proceed with a regular IPO, selling stock that has the same voting rights as that held by company founders.

Chinese steel website Zhaogang said to drop dual-class IPO plans

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Chinese steel website Zhaogang said to drop dual-class IPO plans

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