Shein proposes cash payouts, more shares for late-stage investors ahead of IPO

Aug 3 (Reuters) - Shein is considering lowering the outgo of concern for immoderate late-stage investors arsenic the fast-fashion retailer pursues an IPO astatine a ‌lower valuation, according to filings with the Hong Kong Stock Exchange.

The institution ‌may connection payouts to aboriginal investors arsenic good arsenic much shares with little conversion terms for their ​holdings, the nationalist filings showed.

The plans laid retired successful the nationalist disclosure confirmed Reuters' study successful July, successful which a root with nonstop cognition of the substance said the institution volition compensate investors for the diminution successful valuation, including currency payment.

Shein's valuation has ‌fallen from $98.2 cardinal successful a ⁠2022 fundraising circular to $64 cardinal successful a 2023 round. The root told Reuters the steadfast is seeking up to $50 cardinal successful valuation ⁠in the upcoming IPO.

The steadfast has agreed to springiness investors successful its Pre-D, D and D+ backing rounds a guaranteed currency payout adjacent to an 8% yearly return, oregon astir $1.1 ​billion ​in total, connected their archetypal investment, according to ​the filings.

Calculated from the time ‌they archetypal bought successful up until March 4, 2026, this outgo volition beryllium made successful 3 adjacent currency payments owed by the extremity of March, June, and September 2026.

Meanwhile, if the institution goes nationalist astatine a terms little than what the investors paid, those investors are protected from losing money.

Investors with preferred shares volition automatically person ‌into regular Class B shares upon listing, and ​their conversion terms gets adjusted downwards truthful they ​get much shares to compensate.

Shein did ​not instantly respond to a Reuters petition for remark connected the ‌cash and stock connection plans.

Investors are ​expected to scrutinise whether ​Shein tin warrant the $40 cardinal to $50 cardinal valuation it is seeking successful a Hong Kong archetypal nationalist offering aft the filings with the speech showed slowing ​growth, a crisp diminution ‌in profitability, and rising regulatory and ineligible uncertainties.

(Reporting by Anjali Singh successful ​Bengaluru and Selena Li successful Hong Kong and Yantoultra Ngui successful Sigapore; ​Editing by Nivedita Bhattacharjee and Louise Heavens)