China Auto Rental watch: China Auto Rental announced its IPO price range of $10.5 to $12.5 per ADR. The company intends to issue 11 million shares of ADRs to raise funds of $127 million. On the basis of the median of the proposed China Auto Rental IPO price range, the company will command a market value of $ 847 million. The company intends to trade its ADRs on the NASDAQ Global Select Market under the symbol “CARH.”
Each ADR represents four ordinary shares of the company, according to the filing submitted to the U.S. SEC (Security And Exchange Commission). China Auto Rental hired Citibank, N.A as the depository bank on this deal.
Morgan Stanley, J.P. Morgan and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as the joint book-running managers for the China Auto Rental IPO. The company has granted the underwriters an option to purchase an additional 1.65 million ADRs to cover over-allotments.
The company expects to recieve net proceeds of approximately $112.5 million from this offering on the basis of an assumed initial public offering price of $11.50, the median of the estimated China Auto Rental IPO price range. The company will use the proceeds to buy vehicles and for working capital and other general corporate purpose.
China Auto Rental was founded in 2007 and is the largest car rental company in China, commanding a leading position in the industry as measured by fleet size, network coverage and number of customers.
The company generated revenues primarily from short-term rentals of vehicles. The company grew its revenues from RMB54.0 million in 2009 to RMB143.0 million in 2010 and RMB775.8 million (US$123.3 million) in 2011. Net losses were RMB3.2 million, RMB43.3 million and RMB151.4 million (US$24.1 million) in 2009, 2010 and 2011, respectively. Adjusted EBITDA for 2009, 2010 and 2011 was RMB17.3 million, RMB26.3 million and RMB275.7 million (US$43.8 million), respectively.
The company does not expect to pay dividends in the foreseeable future.