In this undated photo, a visitor looks at a digital product equipped with SenseTime's human pose estimation at a high-tech exhibition in Shenzhen, Guangdong province. (PHOTO / XINHUA)
Chinese artificial intelligence firm SenseTime Group Inc is discussing with advisers whether to delay its Hong Kong initial public offering, according to people familiar with the matter.
The first-time share sale was slated to price on Friday. If SenseTime decides to pause or withdraw the offering, that could make it more difficult to satisfy early backers with whom it has an agreement that it will go public by a certain date, the people said.
SoftBank Group Corp agreed in the most recent funding round for SenseTime that if the company did not list by April, it would have to buy back the shares from investors, one of the people said, asking not to be identified because the information is private.
Eight cornerstone investors had committed to subscribe for $450 million in SenseTime shares, representing about 59 percent of the offering, according to a preliminary prospectus
Deliberations are ongoing and the share sale could still proceed, the people said.
A representative for SoftBank didn’t immediately respond to a request for comment, while a representative for SenseTime couldn’t immediately comment.
Eight cornerstone investors had committed to subscribe for $450 million in SenseTime shares, representing about 59 percent of the offering, according to a preliminary prospectus.
They include the state-owned Mixed-Ownership Reform Fund, which is buying $200 million worth of shares, as well as funds affiliated with Hong Kong’s Pleiad Investment Advisors Ltd. SenseTime’s investors also include Alibaba Group Holding Ltd, Primavera Capital, Sailing Capital and Silver Lake, the prospectus shows.
If the IPO goes ahead, the company will likely need to update the section of its prospectus detailing the risks for potential investors to reflect the blacklist development, the people said.
SenseTime got a boost during the coronavirus pandemic when its facial recognition software was used in numerous Chinese cities to monitor whether people entering subways were wearing masks, take their temperature and detect their identities while their faces were covered.
If the process goes ahead, SenseTime shares are expected to start trading on Dec 17. China International Capital Corp, Haitong International Securities Group Ltd and HSBC Holdings Plc are the joint sponsors for the first-time share sale.
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