Struggling ride-hailing company Didi has initiated informal talks with the Hong Kong stock exchange about a potential public listing as the embattled firm tries to shake off the effects of a calamitous IPO in New York, reports the Financial Times. Chinese regulators in effect torpedoed Didi’s business in the days after its US debut last June, ordering its apps to be deleted from stores and launching investigations into how it handles data. Didi’s shares, which began trading at $14, are now worth $4.50, having lost more than $40 billion in market value.
A listing in Hong Kong is now critical for the group, after which it will start the delisting process in the US, offering holders of its US shares a one-for-one swap with its HK shares, according to one big Didi investor. “This is the suggestion from the Chinese [government], so if they can’t pull this off then they are in the penalty box forever,” the investor said.
But a Hong Kong listing will not be straightforward and could yet take a long time to arrange, company insiders and analysts said. Two big challenges are the unresolved government investigation into Didi and its continuing problems obtaining the correct permits for its business and drivers in several cities across China.