By John Revill and Julie Zhu
ZURICH/HONG KONG (Reuters) - Syngenta's $9.5 billion flotation has moved a step closer after the Shanghai Stock Exchange scheduled a hearing next week for the Swiss agrichemicals and seeds company's listing plan.
A rival to U.S. company Corteva (NYSE:CTVA) and German firms BASF and Bayer (OTC:BAYRY), Syngenta was bought for $43 billion by ChemChina in 2017 and folded into Sinochem Holdings Corp in 2021.
The Chinese parent plans to keep a majority stake after the initial public offering (IPO), which is set to be one of the world's biggest this year and expected to value Syngenta at around $50 billion.
The Shanghai Stock Exchange said on Wednesday it planned to conduct a hearing with the company to examine its listing application on March 29. Syngenta has also updated its prospectus with its latest financial figures.
It shows the company aims to raise about 65 billion yuan from the flotation or about $9.44 billion.
Just over 60% of the proceeds will be used to finance acquisitions and to repay debt.
Around 20% will be allocated towards advanced agricultural technology-related research and development, according to the prospectus.
After Syngenta passes the hearing, the IPO will still require registration with the China Securities Regulatory Commission.
The company aims to launch the offering in June, two sources said, with one adding that it is seeking mainly Chinese investors as strategic shareholders.
Syngenta declined to comment, citing Chinese market regulations.
The float will likely be the four-year-old STAR board's biggest - providing a major boost after the scrapping of Ant Group's blockbuster listing in 2020.
The Nasdaq-style STAR Market topped the global charts for IPO fundraising in 2022 having raised $28.5 billion, Refinitiv Eikon data showed.
Syngenta first filed its listing application in July 2021 and has since gone through three rounds of reviews with the Shanghai bourse.
The company reported its highest ever annual sales and earnings on Wednesday. Its 2022 earnings before interest, tax, depreciation and amortisation (EBITDA) rose 20% to $5.6 billion on sales up 19% at $33.4 billion.
Much of the growth came from China, where the company added 136 more Modern Agricultural Platform centres that offer training to farmers and sell its seeds and pesticides, taking its total there to 628.
"All business units saw double-digit growth, benefitting from high demand for products and services designed to promote yield increases and sustainable farming methods," Syngenta said.
But during the fourth quarter, its earnings fell after being hit by higher raw materials costs. It also spent more on reorganising its business and set cash aside to cover macro-economic uncertainties.
Its EBITDA fell 25% to $900 million on sales up 4% to $7.5 billion driven by its seeds business.
"As previously indicated, farmers accelerated their purchases earlier in the year due to supply concerns, moderating fourth quarter growth," the company said.
($1 = 6.8830 Chinese yuan renminbi)