Hutchison Whampoa, the Hong Kong conglomerate chaired by Li Ka-shing, will raise $5.5bn from an initial public offering of units in a trust holding its South China ports after setting the price in the middle of the IPO range, Financial Times reports.
The amount raised is about 6 per cent below the top of the target range of $4.9bn to $5.8bn announced when the IPO of Hutchison Ports Holdings Trust was launched in Singapore two weeks ago.
However, the sale of the group’s Hong Kong, Shenzhen and Pearl River assets is easily south-east Asia’s largest IPO. It comfortably exceeds the $4.1bn raised by Petronas Chemicals in Kuala Lumpur last year.
The final price of $1.01 per unit is just above the middle of the initial indicative range of 91 US cents to $1.08. It is at the mid-point of a tighter range of 99 cents to $1.03 communicated to investors last week.
The price, announced in Singapore after the closure of the retail offer on Monday, was said by people close to the transaction to reflect demands from investors for the highest possible dividend yield.
A high yield was one of the main attractions of the Singapore business trust structure chosen for the IPO by Hutchison Port Holdings, the Hutchison group subsidiary which is the world’s largest container port operator by throughput.
The unit price implies a yield of just below the mid-point of the indicative range of 5.5 per cent to 6.5 per cent for 2011, with the implied yield for 2010 also just below the middle of the indicative range of 6.1 per cent to 7.2 per cent.
The people close to the transaction said there was a possibility that the IPO’s over-allotment option might be triggered, which could raise a further $800m if exercised in full. They said no decision would be taken, however, until after the stock begins trading on the Singapore Exchange on Friday.
A greenshoe offering would be a surprise against the current background of market nervousness caused by rising inflation in Asia, high oil prices and unrest in the Middle East.
Hutchison Port Holdings will retain control of the port assets through a stake of 25 per cent in the listed trust, which is sufficient to prevent any challenge to its right to appoint the trust’s management company.
There was no comment on the IPO from the investment banks managing the offering, Deutsche Bank, Goldman Sachs and DBS Group of Singapore. Canning Fok, Hutchison Whampoa’s group managing director, said last week, however, that the proceeds would be used for debt repayment and capital investment.
The amount raised is about 6 per cent below the top of the target range of $4.9bn to $5.8bn announced when the IPO of Hutchison Ports Holdings Trust was launched in Singapore two weeks ago.
However, the sale of the group’s Hong Kong, Shenzhen and Pearl River assets is easily south-east Asia’s largest IPO. It comfortably exceeds the $4.1bn raised by Petronas Chemicals in Kuala Lumpur last year.
The final price of $1.01 per unit is just above the middle of the initial indicative range of 91 US cents to $1.08. It is at the mid-point of a tighter range of 99 cents to $1.03 communicated to investors last week.
The price, announced in Singapore after the closure of the retail offer on Monday, was said by people close to the transaction to reflect demands from investors for the highest possible dividend yield.
A high yield was one of the main attractions of the Singapore business trust structure chosen for the IPO by Hutchison Port Holdings, the Hutchison group subsidiary which is the world’s largest container port operator by throughput.
The unit price implies a yield of just below the mid-point of the indicative range of 5.5 per cent to 6.5 per cent for 2011, with the implied yield for 2010 also just below the middle of the indicative range of 6.1 per cent to 7.2 per cent.
The people close to the transaction said there was a possibility that the IPO’s over-allotment option might be triggered, which could raise a further $800m if exercised in full. They said no decision would be taken, however, until after the stock begins trading on the Singapore Exchange on Friday.
A greenshoe offering would be a surprise against the current background of market nervousness caused by rising inflation in Asia, high oil prices and unrest in the Middle East.
Hutchison Port Holdings will retain control of the port assets through a stake of 25 per cent in the listed trust, which is sufficient to prevent any challenge to its right to appoint the trust’s management company.
There was no comment on the IPO from the investment banks managing the offering, Deutsche Bank, Goldman Sachs and DBS Group of Singapore. Canning Fok, Hutchison Whampoa’s group managing director, said last week, however, that the proceeds would be used for debt repayment and capital investment.