Samsonite International S.A., the world's biggest luggage company, plans to raise up to $1.5 billion in a Hong Kong initial public offering, joining a slew of foreign companies cashing in on investor interest in China.
Samsonite said Thursday it will sell 671.24 million shares in the IPO, equivalent to a 48 percent stake in the company, at 13.50 Hong Kong dollars to 17.50 Hong Kong dollars. That would raise 9.1 billion to 11.7 billion Hong Kong dollars ($1.2 billion to $1.5 billion).
It also has an option to sell 15 percent more shares if there is enough demand, raising an extra $200 million. The money will be used to pay off debt.
Samsonite, which was founded in 1910 in Denver, Colorado, plans to focus on developing its business in high-growth Asian markets, especially China and India, according to pre-listing documents filed with the Hong Kong stock exchange.
The company, which also owns the American Tourister brand, is based in Luxembourg.
"We need to orient the company to where the center of gravity will be in the future, which I think is going to be in China and Hong Kong," Chairman Tim Parker said.
"I don't think America was probably right for us. I don't think Europe was really where we are headed. This was really the logical choice" for a stock market listing, he told reporters at a Hong Kong press conference via videolink from Singapore.
China and India are Samsonite's second- and third-biggest markets. Only the United States is bigger.
The company predicts Asia will be the world's fastest growing luggage market over the next four years, powered by a surge in Chinese and Indian travelers.
Samsonite started out manufacturing luggage at its own factories, but after stumbles over the past decade, it now outsources production. Almost all of its manufacturing is done in Asia, with Chinese factories supplying 84 percent of its suitcases.
The company had a 9.6 percent share of the global luggage market last year, according to research by Frost & Sullivan cited by Samsonite. Second-place VF Group, maker of Jansport, Eastpak and North Face bags, had 3.1 percent.
Samsonite is the latest in a string of foreign companies to hold IPOs in Hong Kong as they seek to ride growing investor interest in China.
MGM China, a Macau casino operator controlled by Las Vegas-based MGM Resorts International, raised $1.5 billion last month in the fourth largest global gaming IPO on record, according to deal tracking company Dealogic.
Global commodities trader Glencore International PLC chose Hong Kong for its secondary listing when it went public last month. Italian fashion house Prada is also planning a Hong Kong IPO while luxury handbag maker Coach Inc. plans a secondary listing.
Private equity firm CVC Capital Partners owns about 54.3 percent of Samsonite while Royal Bank of Scotland owns 30 percent.
Parker said CVC and RBS would sell off a large chunk of their shares but will "still be left with an appreciable stake in the business."
Samsonite was family owned until the 1970s before being taken over by various investors and private equity groups. Its shares were traded on the Nasdaq Smallcap Market from 1994 until 2002, when it had to drop off the exchange because its market capitalization fell below the minimum threshold.
The listing is scheduled for June 16.