Ultrasonic scandal takes toll on Snowbird's IPO

Snowbird AG's initial public offering in Germany was hurt by the disappearance of executives at Ultrasonic AG, a Chinese shoemaker listed in Frankfurt, according to the firm managing the IPO for the Chinese down processor.

"It's been bad luck that the Ultrasonic scandal hit in the middle of our subscription period and negatively impacted the marketing of the Snowbird IPO," Michael Kott, chief executive officer of CM-Equity AG & Co KG Financial Services, the Munich-based company managing the offering, said in an interview. "We only were able to sell about 20 percent of what we had aimed for."

Shares of Chinese companies that included fashion label VanCamel AG and Tintbright AG, a textile producer, have declined since Ultrasonic CEO Wu Qingyong was fired last week after he and his son, the chief operating officer, disappeared and the shoemaker's cash went missing. The executive said in an interview on Wednesday in China that he borrowed company money for personal use and planned to pay it back later this month.

It's the second time this year that a senior executive from a Chinese company listed on the Frankfurt Stock Exchange has disappeared. Packaging company Youbisheng Green Paper AG replaced Huang Haiming as CEO on Aug 1 after he vanished without a trace. It entered preliminary insolvency proceedings two weeks later.

Snowbird sold 1.6 million shares at 6 euros apiece, the upper end of the price range, mainly to institutional investors, it said in a statement on Thursday. Shares will start trading on the Frankfurt Stock Exchange on Monday. It had planned to raise as much as 60 million euros ($77 million) and said on Thursday that gross proceeds will total 9.5 million euros.

Snowbird said it will be valued at about 190 million euros after the offering is completed. The company, a down processor and manufacturer of items such as down bedding, plans to use its share of the proceeds to expand production capacity and increase working capital.