Minzhong, a leading Chinese food processing company backed by Singapore's GIC and buyout fund Olympus Capital, has hired JPMorgan to help it go public, sources said on Monday.
It would be Singapore's largest IPO since June 2008.
Minzhong, based in the southern Chinese province of Fujian near Taiwan, aims to raise between $100 million and $150 million through a Singapore listing by the end of 2009, said the sources who are familiar with the situation.
If successful, Minzhong's listing would become the biggest initial public offering of shares in Singapore since Indiabulls Properties Investment Trust raised about $260 million via its Singapore IPO in June 2008.
It can be a small IPO to Hong Kong or Shanghai but big enough to Singapore under current market conditions, said one source.
On the other hand, the company chooses Singapore for listing partly because of GIC's influence there, he added.
Minzhong's IPO plan came after GIC and Olympus Capital had both recently agreed to call off the sale of the food processor whose products include organic foodstuff, air-dried and frozen vegetables and healthcare drinks, said the sources.
Minzhong has more than 30 years of history and experience in the vegetable processing business and most of its products are sold to international markets rather than at home, according to its company website. (www.chinaminzhong.com)
JPMorgan declined to comment. Minzhong could not be reached immediately for comment. The sources declined to be identified as they were not authorised to speak to the media.
JPMorgan was hired to advise on the sale of Minzhong, which gained interests from many other private equity funds but all talks stalled over price, said the sources, adding then GIC and Olympus Capital decided to ask JPMorgan to help Minzhong list.
Agriculture is a popular sector and China remains as a hot topic. When Asian markets recover quickly, it is natural to see the controlling investors of Minzhong choose to list the company rather than sell it cheaply in a hurry, said one source.
JPMorgan has been hired as the lead underwriter for Minzhong's IPO and the Wall Street bank is currently lining up local financial institutions as co-underwriters to get their help to sell part of its IPO to retail investors, said the sources.
Unlike in Hong Kong or Shanghai where a major Chinese company can easily raise more than $1 billion, the typical amount raised in an IPO in Singapore is around $15-20 million.
For example, between July and September, Singapore Exchange saw just 11 new IPOs that raised $185 million in total.
Singapore last attracted $1 billion-plus listings in 2006 when Thai Beverage listed on the main board and Wilmar International, the world's largest palm oil firm, made its debut in Singapore via a reverse takeover of a small healthcare firm.
(Additional reporting by Kennix Chim in HONG KONG; Editing by Jacqueline Wong)