It may spin off Swire Properties in deal raising US$2.5-US$3b
Swire Pacific Ltd, the Hong Kong company with businesses ranging from soft drinks to airlines, plans to hire Goldman Sachs Group Inc, HSBC Holdings plc and Morgan Stanley to arrange an initial public offering for its property unit, said four people with knowledge of the plan.
The company may spin off Swire Properties Ltd in a share sale that may raise US$2.5 billion to US$3 billion next year, said two of the people, who declined to be identified because the information is private.
It is likely to be the largest IPO of a property company in the Asia-Pacific region since at least 1999, according to data compiled by Bloomberg.
A separate listing may allow Swire to command a higher valuation for its property assets and raise cheaper capital amid a rebound in Hong Kong’s office rents and home prices.
Swire plans to make a formal announcement through the Hong Kong stock exchange today, said a fifth person familiar with the company’s plan, asking not to be identified before the announcement.
Martin Cubbon, chief executive officer of Swire Properties, declined to comment through e-mail.
Connie Ling, a spokeswoman for Goldman in Hong Kong; Annie Cheng, a HSBC spokeswoman, and Nick Footitt, a Morgan Stanley spokesman in the city, also declined to comment.
Landlord Swire Properties is the biggest commercial landlord in eastern Hong Kong Island.
Property accounted for about 32 per cent of the parent company’s revenue in the first half.
Swire Pacific generated revenue of HK$3.8 billion (S$681.6 million) from its property assets in the first half, according to the company’s last financial report.
That made the business the second-largest contributor to sales after the beverage unit.
The Link Reit’s US$2.8 billion IPO in Hong Kong in November 2005 was the largest property-related IPO in the Asia-Pacific since 1999.
Source : Business Times – 10 Dec 2009
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