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PR Newswire
18-01-2011, 07:19 PM
* To spin off port trust unit in Singapore
* To raise $6 bln in Singapore listing-IFR
* Listing to be completed by March-IFR
* Shares dip 2.4 pct; second-best performer in Jan (Adds details, quotes)
By Fiona Lau and Eveline Danubrata
HONG KONG/SINGAPORE, Jan 18 (Reuters) - Hutchison Whampoa plans to spin off its holdings in two ports assets, a move expected to raise $6 billion in what could be Southeast Asia's largest ever stock offering.
The listing by Hutchison, a ports-to-telecom conglomerate owned by Hong Kong tycoon Li Ka-shing, will take place on the Singapore Stock Exchange, allowing the company to use the proceeds for investments in its ports and infrastructure business.
"Hutchison's divestments will likely result in a meaningful reduction in the company's net debt and increase the company's financial flexibility," said Kalai Pillay, senior director at Fitch's Asia-Pacific Corporates Team, noting that the deal will also reduce cash flows to Hutchison from the ports business.
The key assets of Hutchison Port are deep-water container port operations in Hong Kong, China's southern Guangdong province and Macau.
Hutchison proposes to spin off Hutchison Port Holdings Trust in a separate listing in Singapore, where regulations are favourable for trusts-like companies to list, it said in a filing with the Hong Kong stock exchange on Tuesday.
The statement helped explain why Hutchison would float the ports unit in Singapore rather than Hong Kong, where heavy demand from investment funds have made Hong Kong by far the top exchange for public listings in the last two years.
Shares of Hutchison fell 2.4 percent on Tuesday to HK$93.65 per share in a broader market down 2.4 percent. Traders attributed the dip to the run up the stock has enjoyed this year.
Hutchison's shares have risen 17 percent since the beginning of the year, making it the second-best performer among the main Hang Seng index. Since it reported earnings in August, its shares have jumped 77 percent .
Hutchison's massive offering allowed the Singapore exchange to step out of the shadow of its neighbour to the north.
"This is a confidence booster for Singapore stock exchange and will continue to encourage the exchange to seek (its) niche to compete with the larger markets instead of competing head on without any product or service differentiation," said Roger Tan, head of research at SIAS Research in Singapore.
Hutchison Port's listing will be completed by March and will allow the unit to raise $6 billion, according to IFR, a Thomson Reuters publication that first reported the size.
If successful, the deal will make it the largest listing eve in Southeast Asia and Singapore. So far, the biggest listing in southeast Asia is Malaysia's Petronas Chemicals , which raised $4.1 billion last year. In Singapore, Singapore Telecommunications' S$4 billion ($3 billion) float in 1993 was the biggest listing.
STRONG WIN FOR SINGAPORE
"I think it would be positive for the stock market volume and therefore favourable for the Singapore stock exchange," said Jit Soon Lim, head of equities research for Nomura in Singapore.
Lim said the listing will also help the Singapore exchange's position as the bourse for shipping and offshore stocks.
Asia is home to the largest ports and major port operators, such as Shanghai International Port and Dalian Port . Shanghai now has the world's busiest container port and Singapore ranks No. 2, thanks to the booming Asian trade-reliant economies.
Hutchison's proposal is subject to the approval of the Singapore stock exchange, the Monetary Authority of Singapore, the Hong Kong stock exchange and the company's board.
Hutchison has hired joint bookrunners and joint issue managers DBS , Deutsche Bank AG and Goldman Sachs (Singapore), to apply for the Singapore listing.
In 2009, Hutchison Whampoa posted a net profit of HK$14.168 billion, a 12 percent rise from a year earlier. Hutchison Port's profit attributable to the company totalled HK$1.827 billion ($234 million) in 2009, down from HK$2.109 billion in 2008. (Additional reporting by Daniel Stanton from IFR, Donny Kwok and Vikram Subhedar in Hong Kong and Harry Suhartono in Singapore; Writing by Lee Chyen Yee; Editing by Ken Wills and Anshuman Daga)
* To raise $6 bln in Singapore listing-IFR
* Listing to be completed by March-IFR
* Shares dip 2.4 pct; second-best performer in Jan (Adds details, quotes)
By Fiona Lau and Eveline Danubrata
HONG KONG/SINGAPORE, Jan 18 (Reuters) - Hutchison Whampoa plans to spin off its holdings in two ports assets, a move expected to raise $6 billion in what could be Southeast Asia's largest ever stock offering.
The listing by Hutchison, a ports-to-telecom conglomerate owned by Hong Kong tycoon Li Ka-shing, will take place on the Singapore Stock Exchange, allowing the company to use the proceeds for investments in its ports and infrastructure business.
"Hutchison's divestments will likely result in a meaningful reduction in the company's net debt and increase the company's financial flexibility," said Kalai Pillay, senior director at Fitch's Asia-Pacific Corporates Team, noting that the deal will also reduce cash flows to Hutchison from the ports business.
The key assets of Hutchison Port are deep-water container port operations in Hong Kong, China's southern Guangdong province and Macau.
Hutchison proposes to spin off Hutchison Port Holdings Trust in a separate listing in Singapore, where regulations are favourable for trusts-like companies to list, it said in a filing with the Hong Kong stock exchange on Tuesday.
The statement helped explain why Hutchison would float the ports unit in Singapore rather than Hong Kong, where heavy demand from investment funds have made Hong Kong by far the top exchange for public listings in the last two years.
Shares of Hutchison fell 2.4 percent on Tuesday to HK$93.65 per share in a broader market down 2.4 percent. Traders attributed the dip to the run up the stock has enjoyed this year.
Hutchison's shares have risen 17 percent since the beginning of the year, making it the second-best performer among the main Hang Seng index. Since it reported earnings in August, its shares have jumped 77 percent .
Hutchison's massive offering allowed the Singapore exchange to step out of the shadow of its neighbour to the north.
"This is a confidence booster for Singapore stock exchange and will continue to encourage the exchange to seek (its) niche to compete with the larger markets instead of competing head on without any product or service differentiation," said Roger Tan, head of research at SIAS Research in Singapore.
Hutchison Port's listing will be completed by March and will allow the unit to raise $6 billion, according to IFR, a Thomson Reuters publication that first reported the size.
If successful, the deal will make it the largest listing eve in Southeast Asia and Singapore. So far, the biggest listing in southeast Asia is Malaysia's Petronas Chemicals , which raised $4.1 billion last year. In Singapore, Singapore Telecommunications' S$4 billion ($3 billion) float in 1993 was the biggest listing.
STRONG WIN FOR SINGAPORE
"I think it would be positive for the stock market volume and therefore favourable for the Singapore stock exchange," said Jit Soon Lim, head of equities research for Nomura in Singapore.
Lim said the listing will also help the Singapore exchange's position as the bourse for shipping and offshore stocks.
Asia is home to the largest ports and major port operators, such as Shanghai International Port and Dalian Port . Shanghai now has the world's busiest container port and Singapore ranks No. 2, thanks to the booming Asian trade-reliant economies.
Hutchison's proposal is subject to the approval of the Singapore stock exchange, the Monetary Authority of Singapore, the Hong Kong stock exchange and the company's board.
Hutchison has hired joint bookrunners and joint issue managers DBS , Deutsche Bank AG and Goldman Sachs (Singapore), to apply for the Singapore listing.
In 2009, Hutchison Whampoa posted a net profit of HK$14.168 billion, a 12 percent rise from a year earlier. Hutchison Port's profit attributable to the company totalled HK$1.827 billion ($234 million) in 2009, down from HK$2.109 billion in 2008. (Additional reporting by Daniel Stanton from IFR, Donny Kwok and Vikram Subhedar in Hong Kong and Harry Suhartono in Singapore; Writing by Lee Chyen Yee; Editing by Ken Wills and Anshuman Daga)
