Home Listing rules EXCLUSIVE mogul Richard Li’s FWD plans to move US IPO to Hong Kong – sources

EXCLUSIVE mogul Richard Li’s FWD plans to move US IPO to Hong Kong – sources

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HONG KONG, Nov. 10 (Reuters) – Asian insurer FWD Group, controlled by Hong Kong billionaire Richard Li, is considering moving its US $ 2-3 billion share sale to Hong Kong, two said. sources with direct knowledge of the case.

The Hong Kong-based company, which confidentially filed the New York Initial Public Offer (IPO) in June, is considering the switch due to delays by US regulators reviewing the plan and lack of interest from investors, the officials said. sources at Reuters.

A spokesperson for FWD declined to comment on Wednesday when Reuters asked him about a possible change in listing location.

The insurer has yet to receive approval from U.S. regulators to complete its IPO before the end of the year, a timeline sources previously reported. Read more

One source said the delays had heightened fears the approval might not be granted, while the second source cited mixed investor interest.

The uncertainty prompted FWD and its advisers to consider returning to Hong Kong for its market debut, the two sources said. A final decision has yet to be made, a third source said.

FWD has faced questions from the U.S. Securities and Exchange Commission over its ties to mainland China and has been treated by authorities as a Chinese company rather than a Hong Kong entity, one of the officials said. sources and a fourth person.

The four sources could not be named because the information has not yet been made public.

Last week, FWD filed amended prospectuses with the SEC that included an expanded section on risk factors, according to which the company could not guarantee that Beijing would not interfere with its business. Read more

FWD pointed out in the file that it has no business on the mainland and only has representative offices, some information technology and support staff in China.

The SEC has started imposing new disclosure requirements on Chinese companies seeking to register in New York as part of a campaign to educate investors about the risks involved, Reuters reported in August.

FWD’s foundation was laid in 2012 with the acquisition of ING’s business units in Hong Kong, Macao and Thailand for $ 2.1 billion, and it has since continued this focused approach to grow in the region.

It is now present in 10 markets in Asia and sources had previously estimated that the IPO in New York would value the company between 13 and 15 billion dollars.

SHAREHOLDING STRUCTURE

A listing in Hong Kong would require FWD to change its dual class shareholding structure, given that it has weighted voting rights. Hong Kong’s listing rules only allow weighted voting rights for innovative companies and FWD does not meet the definition of the stock exchange in this category.

There has been indicative interest in up to $ 500 million of shares for sale in the planned New York IPO, according to documents filed by the company.

The foundation of Richard Li’s father, Li Ka-Shing, Hong Kong’s richest man, has said it could buy up to $ 300 million in shares. Richard Li’s PCCW Ltd, a major Internet service provider in Hong Kong, could take $ 100 million, according to the documents.

FWD’s majority shareholder, Pacific Century Group – another Richard Li company – has also expressed interest in investing $ 100 million.

Reporting by Scott Murdoch, Julie Zhu and Kane Wu in Hong Kong; Editing by Sumeet Chatterjee and Jane Wardell

Our standards: Thomson Reuters Trust Principles.


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