Usually crowdfunding is employed as an alternative fundraising vehicle for companies that want to avoid the regulatory requirements of a sharemarket listing, however Chinese fruit farming company, Dongfang Modern, is taking the unusual step of launching an equity crowdfunding campaign in New Zealand to supplement the funds it’s raising though its Australian initial public offering (IPO).
Ganzhou-based Dongfang, which produces tangerines, navel oranges, camellia, and pomelos, is in the finals stages of raising between A$39 million (US$43.6 million) and a cap of A$50 million through its listing on the ASX. Although the company has already raised the minimum A$39 million from the IPO, it has extended the original offer that was scheduled to close on August 7 to August 17, and is giving New Zealand investors the opportunity to apply for up to NZ$2 million of the shares through the crowdfunding website, Equitise.

 

Dongfang is one of many Chinese companies that is listing on the Australian exchange to avoid market volatility and long wait times in China, according to Reuters, which reports that even bigger listings from China are expected. However, of the 38 Chinese companies listed in Australia since 1996, only five are reportedly trading at or above their issue price because of language barriers and differences in business practices between Asia and Australia.

 

The shares issued through the New Zealand crowdfunding platform are being priced at a slight discount at NZ$1.10 compared to A$1 each through the IPO, but would be of the same class as those issued through the formal sharemarket prospectus, and would also be traded on the ASX.

 

Dongfang has stated that the company plans to use the fresh capital to fund the acquisition of additional camellia plantations.