Graff braves market woes to float at $1bn in HK

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Graff Diamonds, the high-end jeweller, is forging ahead with an initial public offering to raise up to $1bn (£630m), setting a price range for its Hong Kong flotation despite a sell-off in equity markets.

The London-based jeweller, founded by the billionaire Laurence Graff in 1960, yesterday set an indicative share-price range at HK$25-HK$37, according to sources familiar with the plans.

Graff plans to sell $850m of new shares and $150m in existing shares, the sources added. The deal is expected to comprise 211-312 million shares and could rise by 15 per cent to meet additional demand.

Graff is hoping to join the Italian fashion house Prada, luggage maker Samsonite, French cosmetics company L'Occitane and other global brands that have listed in Hong Kong looking to tap booming consumer demand and rising wealth in Asia.

The company is betting on resilient demand for diamonds and high-end jewellery, its founder said in November.

Graff is tapping Hong Kong equity markets after the worst start for IPOs in the Asia-Pacific region in about four years, with overall equity market activity down about a fifth from last year.

The benchmark Hang Seng index is down 7 per cent since 7 May, when Graff began meeting institutional investors and fund managers to gauge demand for the offering.

Graff's profit should reach $264m in 2014 from $117m, but the growth rate is forecast to slow in the coming years, analysts say.