Chinese food delivery company Meituan is looking to raise 9 billion to 10 billion yuan ($1.26 billion to $1.4 billion) in its maiden dim sum bond offering, according to people familiar with the matter, adding to a wave of recent issuance in the increasingly hot market, Bloomberg reported.
Hong Kong-listed shares of Meituan dropped 1.5% in morning trading.
The offshore-yuan denominated offering would include five-year and 10-year notes, the people said, asking not to be identified as the matter is private. Meituan may market the bonds as early as next week, they added. Discussions are ongoing and details could change.
Meituan didn’t respond to a request for comment.
Meituan’s potential offering comes amid rising competition in the food delivery and retail sectors. It also follows a rush of dim sum bond sales by Chinese tech companies looking to secure cheap financing. Tencent Holdings Ltd. and Baidu Inc., for example, have together sold 23.4 billion yuan of offshore yuan bonds this year.
The dim sum bond market has also drawn interest from local Chinese governments and countries such as Indonesia. Turkey’s sovereign wealth fund, meanwhile, is considering raising about 1 billion yuan via a dim sum bond sale.
Meituan has faced an increasingly crowded field in China’s food delivery sector, where rivals have been slashing prices. Alibaba Group Holding Ltd., Meituan and JD.com Inc. have been engaged in China’s most visible price war this year, as each ramped up aggressive discounts and perks to entice consumers to their food delivery services.
Earlier this month, China’s top economic planning agency and market regulator unveiled new measures aimed at curbing disorderly price competition, warning that such practices are undermining industry development and ultimately the country’s economic growth.