Two people with direct knowledge of the matter said that on December 10 that Chinese artificial intelligence (AI) startup SenseTime Group was discussing the fate of its planned $767 million Hong Kong initial public offering (IPO) with the city’s stock exchange.
This action follows a report from the Financial Times on Thursday that the United States will put the company on an investment blacklist on Friday that would mean U.S.-based investors could not buy shares in the company.
Since this information was not yet made public, the sources declined to be named. The sources told Reuters that SenseTime had not been aware that the blacklist was under consideration.
The Hong Kong Stock Exchange declined to comment and SenseTime did not instantly respond to Reuters’ requests for comment.
During the IPO, SenseTime had planned to sell 1.5 billion shares within a price range of HK$3.85 to HK$3.99 each. According to the firm’s filings, it was due to set the final price and allocate shares to institutional investors on Friday.
Late on Thursday and early on Friday SenseTime and its advisors held urgent talks on how the ban would impact its IPO, which was in its final stages when the blacklist report was published, people with knowledge of the matter said.
During the book-building process, U.S.-based investors had lodged bids to buy stock, one person with direct knowledge of the matter told reporters. Once the likely ban was reported, however, some investors started to pull their bids to buy shares, according to a second source.
Ahead of the transaction’s expected launch on Monday, more than half of the deal, $450 million, had been sold to cornerstone investors. The filings showed that SenseTime is due to start trading on December 17.
