Tuesday, January 18, 2011
The listing of Hutchison’s Hong Kong and Pearl River Delta port assets, which together constitute the largest port business by volume in the world, could be the biggest IPO in Asia this year.
Another person familiar with the deal said it could raise at least US$3 billion, making it the biggest ever public offering in Singapore, topping the IPO of SingTel, which raised around S$4 billion in 1993. It would also dwarf Global Logistic Properties’ US$2.9 billion IPO in 2010.
“It will be a landmark deal,” the second person said. “The exact amount is yet to be worked out, but our initial estimates suggest it would be at least US$3 billion. But it also depends on the market conditions and how the response is,” the person added.
The person said that if all necessary approvals are obtained, Hutchison Whampoa’s IPO could hit the market either in late February or early March.
Earlier in the day, Hutchison Whampoa said it plans to spin off its ports assets in a Singapore listing and has appointed DBS Bank, Deutsche Bank AG and Goldman Sachs (Singapore) as joint bookrunners and joint issue managers for the global offering of Hutchison Port Holdings.
“It is proposed that HPH (Hutchison Port Holdings) Trust will be established as a business trust in Singapore,” Hutchison Whampoa said in the statement.
Hutchison Port Holdings’ principal assets include deep-water container port operations in Hong Kong and China’s Guangdong province.
Hutchison Whampoa is the controlling shareholder of Hutchison Port Holdings and currently indirectly owns 80% effective interest in the world’s leading port investor, developer and operator with interests in a total of 308 berths in 51 ports, in 25 countries throughout Asia, the Middle East, Africa, Europe, the Americas and Australasia.
It said that initial business portfolio will comprise Hutchison Whampoa’s entire effective interest in the deep-water container ports in Hong Kong and the Guangdong province of China, entire effective interests in its port ancillary interests in the same geographical area as well as entire economic benefits in certain river ports in China.
These portfolio’s include Hongkong International Terminals Ltd.and Yantian International Container Terminals in Shenzhen, Hutchison Logistics, which provides supply chain solutions logistic services.
The statement also said that Hutchison Whampoa would remain a significant unitholder in HPH Trust post offering.
The offering is expected to comprise of public offering of the units in Singapore, an international offering of the units professional, institutional and other investors and a preferential offering of the units to ‘Qualified Shareholders’.
“There is significant potential for economic and trade growth in the Pearl River Delta generally and the port industry is well-positioned to capitalise on such opportunities,” Hutchison Whampoa said.
In 2009 Hutchison Port Holdings Trust made a HK$2.68 billion profit (US$344.6 million) from HK$10.26 billion in revenue.
In a report earlier this month, JP Morgan Chase & Co. estimated Hutchison Whampoa’s ports business accounts for about 24% of its net asset value of HK$480.4 billion.