AIA Group Ltd said yesterday it could raise up to US$20 billion in its global initial public offering (IPO) this month, putting it on track to be the world’s second biggest IPO of this year.
Announcing details of the sale at a press conference in Hong Kong, the Asian unit of US insurer AIG said it would initially offer 5.86 billion shares at between HK$18.38 to HK$19.68 (US$2.37 to US$2.53) each, or up to US$15 billion.
It said it could issue up to 8.08 billion shares if it exercised a greenshoe option, which would bring the total raised to around US$20 billion and leave AIG with a stake of just 32.9 percent.
“This IPO serves as a great catalyst for the next and exciting phase in the AIA’s history,” Mark Tucker, group executive chairman and chief executive officer, said via a live video feed from the US.
“With the global offering, AIA will become the only -independent, listed life insurance group exclusively focused on the Asian growth opportunity — the first of its kind in the life insurance sector,” Tucker said.
Earlier this year, Agricultural Bank of China (中國農業銀行) raised a total of US$22.1 billion from an IPO, exceeding the previous record set by the Industrial and Commercial Bank of China (中國工商銀行), which raised US$21.9 billion in 2006.
Shares in AIA will be offered from today to Thursday, with -trading expected to begin on Oct. 29.
The US insurer, which is looking to repay US taxpayers after a government bailout in 2008, won approval last month for the sale of its Asian unit.
AIG was forced to look again at the option of publicly floating AIA in Hong Kong after the collapse in June of Prudential’s US$35.5 billion takeover bid for the company.
Among the cornerstone investors are the Kuwait Investment Authority, the oil-rich Gulf emirate’s sovereign wealth fund, and a number of Hong Kong tycoons.
The Kuwait fund, as well as Chow Tai Fook Nominee Ltd, NWS Financial Management Services and six other companies have agreed to buy a total of about US$1.9 billion in shares at the final offer price, AIA said.
Chow Tai Fook Enterprises (周大福企業有限公司) is a jewelry enterprise owned by Hong Kong billionaire Cheng Yu-tong (鄭裕彤), with a total market value of more than HK$256 billion.
Cheng also owns NWS Holdings Limited, a subsidiary of New World Development Company (新世界發展有限公司), which is involved in transport and financial services in Hong Kong.
AIA was the largest foreign life insurer in China last year based on life insurance premiums.
“The life insurance market potential in Asia is unequalled. There is enormous headroom for profitable growth in all our markets and we have a very clear strategy to unleash the potential of AIA, which we believe will deliver exceptional value to our shareholders,” Tucker said.
AIA said that as of May 31, it had total assets of US$95.7 billion.The company believes its consolidated operating profit for the fiscal year ending Nov. 30 will not be less than US$2 billion.
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