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Didi Chuxing
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Didi starts to delist from New York and aims for Hong Kong amid Beijing scrutiny

  • Didi announced Friday that it would delist in New York after ‘careful study’ and prepare for a Hong Kong listing, with a shareholder vote to be organised later
  • Beijing launched a cybersecurity review into the company days after its blockbuster IPO on June 30

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Signage at the Didi Chuxing offices in Hangzhou on August 2, 2021. Photo: Bloomberg
Coco Feng,Che PanandPeggy Sito

Didi Global said it would commence the process of removing its stock from the New York Stock Exchange for a listing in Hong Kong, as China’s dominant ride-hailing service operator makes an unprecedented exit from the world’s largest capital market five months after Chinese regulators opened a probe into the company.

“After careful study, the company will start the work of delisting from NYSE and initiate preparation for listing in Hong Kong with immediate effect,” Didi Chuxing said in a one-line Chinese statement on its official Weibo account on Friday.

In a separate corporate statement in English, Didi said the plan includes converting the American depositary shares (ADSs) from the NYSE “into freely tradeable shares” on another exchange. The company added that it will organise a meeting for shareholders to vote on the issue “at an appropriate time in the future”. Meanwhile, Didi is “pursuing a listing of its class A ordinary shares on the Main Board of the Hong Kong stock exchange.”

“The most sensible route for Didi should be to seek a Hong Kong listing first and then offer the conversion from ADSs to Hong Kong tradeable shares to US shareholders in the US privatisation and delisting process,” said Chen Weiheng, partner and head of China practice at Wilson Sonsini. “This would avoid the sensitive pricing issue and also reduce cash requirement in the privatisation.”

The company did not state a reason for the delisting, but the announcement comes after the Cyberspace Administration of China (CAC) opened a cybersecurity review of the company on July 2, two days after its US$4.4 billion IPO. Soon after, the CAC launched cybersecurity reviews into other companies and Beijing has introduced new rules for listing overseas.

Soon after the probe was announced, Didi’s main app was barred from taking new customers, and dozens of its apps were eventually removed from app stores. A joint government consortium, which included the Ministry of State Security, later started conducting the investigation on company premises.

Didi’s shares opened on Friday 2 per cent lower at US$7.65 in New York, giving all of their 13 per cent pre-market gains, and more. The stock recently changed hands at US$6.92, 11.3 per cent down.

Chen said that Didi “can initiate the HK listing process any time, but presumably they will need the year-end financials before they can make the application next year”.

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