Hutchison Whampoa Ltd (和記黃埔), controlled by billionaire Li Ka-shing (李嘉誠), intends to carry out “sizable” investments in retail, property and other areas this year helped by a planned US$5.8 billion initial public offer (IPO) at a port unit.
“We are planning to release a sizable amount of capex this year,” managing director Canning Fok told reporters in Singapore yesterday.
He didn’t elaborate further on the company’s investment program.
Hutchison decided to sell a stake in a port trust to help cut its debt-to-equity ratio to about 20 percent after considering alternatives including a rights offering, Fok said. The IPO for the Singapore-listed trust may be a record for Southeast Asia, according to DBS Bank Ltd, one of the arrangers.
“The response from investors has been overwhelming and enthusiastic,” Fok said.
Hutchison is offering about 5.4 billion units in Hutchison Port Holdings Trust at a price of US$0.91 to US$1.08 each, excluding an over-allotment offer. The trust would own port assets in Hong Kong and Guangdong Province, China. Hong Kong-based Hutchison plans to manage the trust and retain a stake of about 25 percent.
Cornerstone investors led by Capital Research & Management Co and Paulson & Co would invest US$1.62 billion in the IPO, Hutchison said last month.
The sale could surpass the US$4 billion raised in Singapore Telecommunications Ltd’s 1993 IPO and the total amount raised in Singapore IPOs last year. Deutsche Bank AG and Goldman Sachs Group Inc are helping manage the sale.
Hutchison’s other assets include property in Hong Kong and China, as well as the Watson and Superdrug drugstore chains. The company also invests in mobile-phone services and energy.
Hutchison fell 0.8 percent to HK$90.60 (US$11.60) in Hong Kong trading yesterday. It’s gained 13 percent this year, the third-best performance on the territory’s benchmark Hang Seng Index.
The company opted to sell the port assets in Singapore because business trusts can’t be listed in Hong Kong. The company chose a trust structure because of the assets’ stable cashflow and growth potential, it said in January.
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