RUYI Group has started preparing an initial public offering (IPO) for The Lycra Co., months after acquiring the maker of the elastic material used in jeans and yoga pants, sources familiar with the matter said.

The Chinese group, which lists shares in Shenzhen, is working with Goldman Sachs Group Inc. as it explores the potential deal, which could raise about US$500 million, according to the people. It aims to sell shares in Lycra as soon as this year and is considering the United States as a listing venue, the sources said.

Ruyi completed the purchase of Lycra from Koch Industries Inc. in January, more than 15 months after the deal was announced. Regulatory delays hampered the US$2 billion cross-border acquisition, which also included brands Coolmax fibers and Thermolite insulation.

Kelvin Ho, the group’s chief strategy officer, said in February that Ruyi was planning an IPO for the Lycra unit within three years.

Deliberations for the planned IPO are at an early stage, and details such as fundraising size and timing could change, according to the sources. Ruyi could later select an additional bank to join the deal, one of the sources said.

A representative for Ruyi said the company is considering an IPO for Lycra, though it hasn’t confirmed the listing venue, fundraising size or financial adviser.

Ruyi, which has ambitions of becoming the LVMH of China, is pursuing the listing after a spate of overseas acquisitions of marquee fashion brands, including U.K. trench coat maker Aquascutum and France’s SMCP SA, whose labels include Sandro, Maje and Claudie Pierlot.

(SD-Agencies)