(CapitalWatch, Nov. 13, New York) After a five-month delay, AMTD Digital Inc. is back on track toward an initial public offering in New York worth up to $131.2 million.
AMTD Digital is offering 16 million of its American depositary shares at $6.80 to $8.20 per share. The terms of the deal haven't changed since the company, the digital solutions spin-off of AMTD Group, was scheduled for an IPO on Wall Street in mid-June.
At the time, the IPO did not go through and was delayed by nearly a half-year as China revised its overseas listing laws. Now, AMTD Digital's prospectus has been updated with an additional disclaimer noting risks related to China's regulations.
AMTD Digital is based in Hong Kong and stated that it does "not have any material operation or maintain any office or personnel in Mainland China nor do we have any variable interest entities structure in place." However, should China's laws on "variable interest entities, data and cyberspace security, and anti-monopoly concerns" become applicable, AMTD Digital would face risks and uncertainties, it said.
The company does not have a VIE structure, but is an offshore holding with operating subsidiaries. Its Digital Financial Services business includes AMTD Risk Solutions – the largest corporate insurance solution provider in Hong Kong, PolicyPal for providing digital insurance to consumers and SMEs, Singa Bank for digital banking to businesses, Applaud, which is working towards obtaining a direct insurer license, and CapBridge, a Singapore-based venture capital firm.
AMTD Digital also operates SpiderNet Ecosystem Solutions, a platform connecting entrepreneurs and corporations, and a Digital Media, Content, and Marketing unit, through which it creates and promotes digital solutions content. It also operates a Digital Investments branch, whose portfolio includes Appier, DayDayCook, and WeDoctor.
In its updated filing this week, AMTD Digital also provided updated financials, saying it booked $25.2 million in revenue from contracts on income of $22.2 million in the fiscal year ended April 2021. It had $53.6 million in cash and cash equivalents.
Among its growth drivers, AMTD Digital listed the increasing demand for digital financial services, favorable government initiatives, the increased acceptance of online transactions, improvements in technology, and the need for innovation in the digital insurance industry.
Funds from the IPO will be used for future license applications, acquisitions, IT infrastructure, and human resources; to support expansion, and for general corporate purposes, AMTD Digital said.
Underwriters on the deal have remained the same. They are AMTD, Loop Capital Markets, Maxim Group LLC, and Livermore Holdings Ltd.
AMTD Digital expects to become publicly traded on the New York Stock Exchange under the ticker symbol "HKD." The date of the IPO has not been announced.