November 1, 2019 / 2:41 AM / 18 days ago

UPDATE 1-Warburg-backed ESR shares rise over 7% in Hong Kong debut after $1.6 bln IPO

* Shares rise to as much as HK$18.06 vs IPO price of HK$16.80

* ESR’s failed IPO attempt in June would have raised $1.24 bln (Adds IPO details, updates share price)

By Scott Murdoch and Alun John

HONG KONG, Nov 1 (Reuters) - Industrial property investor ESR Cayman Ltd shares climbed more than 7% on their debut in Hong Kong on Friday, after raising $1.6 billion in a re-launched IPO last week.

The listing adds to recent strong debuts in the city by companies including AB InBev’s Asia-Pacific unit and Topsports International Holdings, despite months-long and often violent anti-government protests.

The Chinese-ruled city slid into recession for the first time since the global financial crisis in the third quarter, according to data released on Thursday, weighed by the protests and a protracted U.S.-China trade war.

Shares in ESR, backed by private-equity investor Warburg Pincus LLC, rose as much as 7.5% to HK$18.06 ($2.30) in opening deals, versus its initial public offering price of HK$16.80 per share - mid-point of guided marketing range.

The stock was trading at HK$17.72 at 0232 GMT, while the broader Hong Kong market was trading 0.3% higher.

ESR was formed in 2016 by the merger of the Japan-centric Redwood Group and China-focused e-Shang, co-founded by Warburg Pincus in 2011.

The company, which manages a range of property-focused funds and its own property investments, relaunched its IPO last week following a failed attempt in June that would have raised up to $1.24 billion.

In an update to the Hong Kong Stock Exchange on Thursday, ESR said it would spend $404 million of the IPO proceeds to repay debt, and $162 million to develop some existing logistic properties and increase its current co-investments.

As part of the IPO process, Canadian pension fund Ontario Municipal Employees Retirement System became a cornerstone investor, with its $585 million investment worth 36.4% of the deal and 9% of the company’s share capital following the float.

$1 = 7.8382 Hong Kong dollars Reporting by Scott Murdoch and Alun John Writing by Sumeet Chatterjee; Editing by Himani Sarkar

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