The country’s two biggest rental companies – Ehi and China Auto – are each mulling an initial public offering (IPO), aiming to gather around $600 million.
The IPO is not public yet, with persons close to the proceedings reporting the plans to Bloomberg. The people detailed the strategy, as the duo aims to fund a huge fleet expansion.
China Auto Rental Inc., China’s largest car-rental operator, is aiming to gather as much as $400 million through a Hong Kong IPO due next month, reported two of the people, who declined to be identified ahead of the official announcement. EHi Auto Services Ltd. also plans to raise $200 million, this time through a stock sale in the US – sometimes in the fourth quarter – according to other people, who also declined to be named after discussing a confidential matter.
According to the sources, Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are implicated with the EHi proceeds, while the China Auto IPO is managed by Credit Suisse Group AG, Morgan Stanley and China International Capital Corp. The two companies seeking additional funding for fleet expansion is not a surprise – as leisure and business travel across China has exploded in recent years, spurring demand for car rentals as well.