Hong Kong mogul Richard Li’s insurance arm braces for $ 3 billion IPO
HONG KONG – Billionaire Richard Li FWD’s insurance business is gearing up for an initial public offering of up to $ 3 billion in the United States this year.
The acquiring insurer, which released its prospectus to offer shares in the early days of Asia, plans to finalize the offer in the fourth quarter, said two people familiar with the plans. Fundraising could be anywhere from $ 2 billion to $ 3 billion, they said. The company had filed a confidential file with the Securities and Exchange Commission in June.
FWD, which has acquired companies in Hong Kong, Indonesia, Vietnam and Thailand in recent years, said in the filing that Athens Life Re, which is managed by private equity firm Apollo Global Management, is considering take $ 400 million in shares in a private placement.
Athene and Apollo will also manage part of FWD’s investment portfolio for at least five years, the prospectus says. FWD also disclosed $ 300 million IPO pledges from the Li Ka Shing Foundation, a charity founded by Li’s father; $ 100 million from PCCW, a Hong Kong-based telecommunications operator backed by Li; and $ 100 million from Li’s holding company PCGI Holdings.
FWD chose the US market over Hong Kong because it allows dual-class share structures, which would allow Li to retain control of the votes, a person familiar with the matter previously said. Hong Kong’s listing rules only allow weighted voting rights for innovative companies, an exception to which FWD, as an insurer, does not qualify, they said.
The PCGI holding company, which focuses on technology, media and telecoms, financial services and real estate, is now the largest shareholder, with a 72.7% stake.
Another Li investment vehicle owns just over 11%, while Swiss Re and a company controlled by Hopu Investment Management chairman Fang Fenglei hold a similar amount, according to the prospectus.
FWD plans to use the proceeds to repay debt, finance acquisitions and for working capital.
The company finalized last year the acquisition of two Metlife units in Hong Kong, Vietcombank-Cardif Life Insurance in Vietnam and PT Commonwealth Life in Indonesia. In 2019, he agreed to pay around $ 3 billion for the life insurance operations of Siam Commercial Bank of Thailand.
FWD posted a net profit of $ 205 million on revenue of $ 6 billion in the first six months of 2021, according to the filing. This compares to a net loss of $ 318 million on revenue of $ 3.9 billion in the same period last year. The value of new business, an important measure of profitability, increased 47.5% during the period to $ 346 million, the report said.
The company, which started in 2013, operates in 10 markets and serves 10 million customers, said its total assets reached $ 62.5 billion as of June 30, up from $ 51.3 billion at the end. of 2019.