Caixin
Jul 10, 2012 07:32 PM

360Buy Still Has No IPO Plans, Company Source Says

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(Beijing) – Leading online electronics retailer 360Buy has no plans to raise funds through an initial public offering or by selling stakes to private equity firms before 2013, a source inside the company has reiterated.

The source said on July 3 that a financial assessment by PricewaterhouseCoopers showed 360Buy had net cash of almost US$ 1 billion by the end of 2011.

"This demonstrates that 360Buy is not out of capital," the source said. "Saying it is in talks with some private equity firms to get financing is all rumors."

The company has adequate cash flow and can get up to 2 billion yuan annually from banking institutions, the source said. This together with the revenue from daily operations meant the company's financial condition was sound it was in no hurry to raise capital.

In June, the company's chief executive officer, Liu Qiangdong, said: "360Buy will not seek to get listed before 2013, which I started to say three or four years ago, and I have never said that it must go public after 2013."

There has been speculation 360Buy submitted an IPO application to the U.S. Securities and Exchange Commission and later sought other fundraising. However, on July 5, Liu wrote on his microblog that these were only rumors.

However, many investors close to 360Buy said it held a meeting with analysts from investment banks in May and they discussed the feasibility of going public before the end of the summer.

The company was not satisfied with the estimated value of US$ 5 billion given to it by analysts, a source at an investment institution who declined to be named said. However, if the 360Buy sticks to its plans, its valuation will go up US$ 2 billion to US$ 3 billion in the next two or three months.

Several sources said 360Buy was appraised at US$ 7 billion in 2011 when it completed a third round of fund-raising.

So far, 360Buy has not made a profit. The reason for its shrinking valuation was its 2011 performance didn't meet its commitment to investors, a source from a private equity firm close to the company said.

The source inside 360Buy denied reports of a low valuation. Its estimated value would be US$ 9 billion to US$ 11 billion in the next six to nine months, the source said. "We welcome any private equity firm that can give us a satisfactory valuation."

The company would invest 10 billion yuan to set up national storage and delivery service stations in the next three years, Liu said. "This year, 360Buy will spend the most on this aspect," Liu said in March.

The total investment on infrastructure for this year will be close to 3.6 billion yuan, Liu said.

The company has expanded its workforce. In the first half of 2012, it had 25,000 employees, and Liu said the number would be 40,000 to 45,000 by the end of the year.

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