Sources: Syngenta prepares to resume Hong Kong listing plan

Swiss agricultural chemicals company Syngenta is seeking advisers for a successful listing that could be the largest in Hong Kong in years, the Financial Times (FT) reported, citing sources familiar with the matter.

The ChemChina-owned group asked banks on February 5 to submit proposals for advisory services on a potential listing that could raise up to $10 billion, one source said. That figure would make Syngenta's IPO one of the 10 largest initial public offerings in Hong Kong.

Syngenta scrapped a plan to list on the Shanghai Stock Exchange in 2024, citing weak economic conditions in mainland China, tighter regulatory controls on IPOs and a difficult outlook for the agricultural sector.

ChemChina bought Syngenta in 2017 in a $44 billion deal that was the largest foreign takeover ever by a Chinese company at the time. ChemChina had wanted to list Syngenta earlier but was blocked by the Covid-19 pandemic.

The listing, which would involve a 20% stake in the company, would allow Syngenta to continue investing in research and development, the source said.

Syngenta makes seeds and agricultural chemicals, including pesticides, for farmers in China and around the world. After its acquisition by ChemChina, Syngenta's then chief executive Erik Fyrwald was quoted by the FT as saying that the Chinese group bought it to "help ensure the quantity, safety and quality of food for the Chinese people” and to improve the environmental impact of agriculture.

The acquisition came as Chinese leaders sought to bolster the country's food security amid rising tensions with the United States.

Syngenta said in a statement last week: "We do not comment on market rumors. We will continue to evaluate our capital markets strategies based on market conditions and other relevant factors that are in the best interests of our shareholders. We intend to return to the capital markets when we are ready.”

Syngenta's cancellation of its Shanghai listing plan came after repeated delays and a sharp decline in domestic stock market activity, as well as tighter supervision of new issuers by the China Securities Regulatory Commission. Western banks were not given major roles in the proposed listing, despite efforts to get involved.

But Hong Kong listings rebounded strongly last year, with the exchange claiming the title of the world's leading market for IPOs, led by mainland Chinese companies such as electric vehicle battery maker CATL, which have sought to raise funds through listings.