Crypto Exchange Huobi Acquires Controlling Share In HKEX-listed Electronics Manufacturer

Investing, News | August 28, 2018 By:

Crypto exchange Huobi has reportedly bought a 73.73% stake in Hong Kong-based Pantronics Holdings through a backdoor listing deal.

A back door listing, referred to as a reverse takeover or reverse initial public offering (IPO), occurs when a privately held company that may not qualify for the public offering process purchases a publicly traded company. Following the acquisition, the buyer may merge both companies’ operations or, alternatively, create a shell corporation that allows the two companies to continue operations independent of each other.

According to shareholding disclosures filed by Pantronics Holdings on August 21, the company is transferring more than 221 million of its ordinary shares to Li Lin, chairman of Huobi Group, via several of Huobi’s subsidiaries. The deal will make Li the largest substantial shareholder and the actual controller of the power-related electrical and electronic products manufacturer. The Pantronics shares are reportedly priced at HK$2.72 ($0.35 USD) with a total amount of roughly $77 million.

A Huobi representative said that the crypto exchange is still waiting for confirmation and approval from the Hong Kong Stock Exchange (HKEX). If approved, the deal will make Huobi eligible for listing on the HKEX. However, Li denied that his company intends to conduct a backdoor listing, saying that “it is just a rumor.”

“The exchange business is currently not fully compliant on a global scale, so a backdoor listing would be very difficult to operate,” Li said. “But I believe that the traditional financial market will embrace the blockchain economy in the future.”

The news came after Randi Zuckerberg, the elder sister of Facebook founder Mark Zuckerberg, joined the Huobi Chain Expert Advisory Committee, which will act as a ‘think tank’ for the platform’s burgeoning efforts. Zuckerberg will assist in the development of Huobi’s public blockchain and will further lend her expertise to the governance of Huobi Chain itself.