(Bloomberg) — Chinese artificial intelligence firm SenseTime Group Inc. is considering reopening orders for its Hong Kong initial public offering as soon as Monday, according to people familiar with the matter, after tensions with the U.S. government delayed its debut.
The AI startup’s offering will be roughly the same size as it had been seeking prior to postponing its listing, the people said. Chinese investors are taking a larger percentage of the shares available to cornerstone investors in the IPO, one of the people said, asking not to be identified as the information is private.
The company previously planned to offer 1.5 billion shares between HK$3.85 and HK$3.99, according to the published prospectus. Eight cornerstone investors committed to subscribe for $450 million in SenseTime shares.
SenseTime announced on Dec. 13 that it would delay the listing and refund subscription funds to retail investors. The company said it would issue a supplemental document with an updated timetable and other relevant information.
Timing is not final, deliberations are ongoing and details of the listing could change, the people said. A representative for SenseTime declined to comment on the IPO timing, and couldn’t immediately comment on the size.
At the top of the previously announced price range, SenseTime’s listing would raise as much as $768 million from the share sale, which would have been one of the biggest in Hong Kong in months.
China International Capital Corp., Haitong International Securities Group Ltd. and HSBC Holdings Plc were listed in the published prospectus as joint sponsors for the first-time share sale.
Bankers had been gauging investor interest in the IPO when news broke about the plan to add SenseTime to the Treasury Department’s list of so-called Chinese military-industrial complex companies, timed to fall on Human Rights Day as well as its expected IPO pricing. The AI firm was added to the list because of its alleged role in oppression against Uyghur Muslims in the Xinjiang autonomous region in western China.
SenseTime said in a statement on Saturday that the U.S. government’s accusations are “unfounded and reflect a fundamental misunderstanding of our company.” The firm has “been caught in the middle of geopolitical disputes” and it will “take appropriate action to protect the interests of our company and our stakeholders.”
The company was already on one U.S. government blacklist, having been put on the Commerce Department’s Entity List in 2019 along with more than 20 others. Those on the entity list are prohibited from doing business with American companies without a license.
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SenseTime got a boost during the coronavirus pandemic when its facial recognition software was used in numerous Chinese cities to monitor whether people entering subways were wearing masks, as well as take their temperature and even detect identities while their faces were covered.
(Updates with size and cornerstone composition in second paragraph and prospectus information in the third.)
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