NetEase looks to raise $500m from Hong Kong IPO of music business Cloud Village

Photo: Zarak Khan / Unsplash

NetEase Inc’s music streaming business Cloud Village Inc is aiming to raise up to $500 million in a Hong Kong initial public offering, according to regulatory filings, after shelving the deal earlier this year following China’s regulatory crackdown on tech companies.

The company is selling 16 million shares, which represents 7.7% of the enlarged share capital, as part of the deal launched on Tuesday.

A price range of $HK190 to $HK220 has been set for institutional investors, according to a term sheet seen by Reuters, which will give Cloud Village a market capitalisation of $5.4 billion to $6.2 billion.

A further 2.4 million shares can be sold as part of a so-called greenshoe option after the company lists on the Hong Kong Stock Exchange.

Cloud Village will price its shares on Nov. 26 and start trading on the Hong Kong Stock Exchange on Dec. 2, according to the term sheet.

NetEase has subscribed for $200 million worth of stock as a cornerstone investor alongside Song Music with $100 million and Orbis Investments with $50 million, according to the term sheet.

Cloud Village scaled back the size of the IPO after initially aiming to raise at least $1 billion in August, sources told Reuters at the time.

But the deal was shelved then as global financial markets reacted to the range of Chinese regulatory tightenings ordered after the Didi Global Inc IPO in the United States.

Cloud Village is considered the closest rival to Tencent’s music streaming service, which dominates the mainland Chinese market.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.