Chinese drone maker EHang Holdings Limited has set terms for an initial public offering (IPO) on the Nasdaq Global Market on Thursday with a target to raise up to $46.4 million.
EHang, which initially revealed its listing plan on October 31, will offer 3.2 million American depositary shares (ADSs) at a price range between $12.5 and $14.5 apiece, according to an updated prospectus filed with the Securities and Exchange Commission on December 5.
Morgan Stanley, Tiger Brokers (NZ) Limited, New York-based investment bank Needham & Company, and boutique investment banking firm Prime Number Capital are the underwriters for the deal. These underwriters were granted the right to purchase up to an additional 480,000 ADSs to cover over-allotments at the IPO price, show the updated prospectus.
Hu Huazhi, founder, director and CEO of EHang, and Ballman Inc, which is wholly-owned by the company co-founder Hsiao Shang-Wen, indicated interest in buying an aggregate of up to $5 million and $2 million, respectively, of the shares being offered in the IPO.
EHang, founded in 2014 and based in southern China’s Guangzhou city, operates as an autonomous aerial vehicle (AAV) technology platform that develops, manufactures and sells passenger drones, and their supporting systems and infrastructure. It offers passenger transportation, logistics, smart city management and aerial media solutions for recreational and commercial use in China and worldwide.
The Chinese drone maker delivered its first passenger-grade AAV to a customer in March 2018. The company has cumulatively offered 38 passenger-grade AAVs, developed two command-and-control centres for smart city management, and unfilled purchase orders for 48 passenger-grade AAVs as of December 5, 2019.
Prior to the listing, Hu is the largest shareholder with a 45.6 per cent stake. GGV Capital, a Chinese venture capital firm investing across Asia and the United States, came second with a 10.8 per cent stake, while Sequoia-backed Chinese seed fund ZhenFund has a 7.6 per cent stake in the company.
The three parties will remain as the principal shareholders after EHang floats shares on the American bourse. Hu, through his wholly-owned company Genesis Rising Limited, will hold a 42.8 per cent stake in EHang with the right to exercise 88.2 per cent of the total voting power.
GGV Capital will own 10.2 per cent shares, while ZhenFund will have a 7.1 per cent stake post the listing, according to the updated prospectus.
EHang plans to float its shares on the Nasdaq Global Market under the ticker “EH.”