China's Dada Nexus to kick off $500 mln U.S. IPO this week -sources
By Joshua Franklin, Scott Murdoch and Julie Zhu
NEW YORK/HONG KONG, May 26 (Reuters) - Chinese delivery firm Dada Nexus Ltd will launch the investor roadshow for its U.S. initial public offering as early as Wednesday, according to people familiar with the matter, braving tensions between Washington and Beijing over Chinese companies pursuing their stock market debut in New York.
The U.S. Senate passed legislation last week that could prevent some Chinese companies from listing their shares on U.S. exchanges unless they follow standards for U.S. audits and regulations. Nasdaq Inc also tightened listing restrictions for companies from China and other countries.
Shanghai-based Dada is backed by Chinese e-commerce firm JD.com and U.S. retail giant Walmart Inc.
The company will aim to sell around $500 million in stock with JD.com and Walmart expected to purchase shares in the IPO as cornerstone investors, the sources said.
Dada and Walmart declined to comment. JD.com did not immediately respond to a request for comment.
Investor scrutiny of Chinese IPOs in the United States has increased in the wake of Chinese coffee chain Luckin Coffee's announcement in April that some employees had fabricated sales accounts. Chinese firms may also be left with fewer listing options after China said it would seek to tighten its grip on Hong Kong, a popular IPO venue for Chinese companies.
In Dada's favor is an uptick in demand for delivery services during the lockdowns enforced in many cities in the wake of the COVID-19 outbreak. Dada operates local on-demand delivery platforms JD-Daojia and Dada Now.
Chinese cloud computing company Kingsoft Cloud Holdings Ltd , another company whose business was seen as benefiting from current economic conditions, has seen its shares trade above their IPO price since going public in New York last month.
Dada's net loss last year widened to 2.46 billion yuan ($344.97 million) from 2.39 billion yuan in 2018.
Goldman Sachs, BofA Securities and Jefferies are the lead underwriters to Dada's offering.
($1 = 7.1310 Chinese yuan renminbi)
(Reporting by Joshua Franklin in New York, and Scott Murdoch and Julie Zhu in Hong Kong; Editing by Andrea Ricci)
