Hong Kong Tycoon’s FWD Nears Filing for $1 Billion IPO

Hong Kong Tycoon’s FWD Is Said to Near Filing for $1 Billion IPO

02 Mar 2022, 05:32 AM IST

(Bloomberg) -- FWD Group Holdings Ltd., the Asian insurer backed by Hong Kong billionaire Richard Li, filed an application for an initial public offering in the city, after U.S.-China tensions scuppered more ambitious plans for an overseas debut.

Sponsoring banks include Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and CMBI, according to a filing Monday to the Hong Kong Stock Exchange which didn’t specify how much it would raise. The company could seek to raise about $1 billion in a share sale this year, Bloomberg News reported earlier, citing people familiar with the matter.

A listing may take place within the first half of the year, depending on market volatility and investor demand, the people said. Considerations are ongoing and the deal could still face delays, the people said.

In December, FWD switched its listing venue to Hong Kong from the U.S., where it had filed for an IPO that could have raised as much as $3 billion. The plan hit a snag amid U.S. regulators’ increasing unease over the long arm of the Chinese government, after a post-IPO probe of Didi Global Inc. kicked off a wide-ranging crackdown on firms listing overseas.

The ensuing rout wiped about $1.5 trillion of market value from Chinese companies globally, prompting the Securities and Exchange Commission to halt first-time share sales in the U.S. by Chinese firms until recently. Although FWD has no business in China, the U.S. market remains broadly closed to larger companies based in China and Hong Kong.

FWD’s value of new business rose to $686 million in 2021, an 11% increase from the previous year, according to the filing Monday. VNB grew 28% on an underlying basis, a separate statement showed. Its segmental adjusted operating profit before tax climbed to $205 million, up 64% from 2020.

The company recently raised more than $1.6 billion in private placements with investors including an insurer backed by Apollo Global Management Inc. The placements were set to value the company at about $9 billion, which would imply about 1.2 to 1.3 times its embedded value, people familiar with the matter said at the time.

The company is using the funds raised in the private placements to reduce the company’s debt, repaying about $1.3 billion last year and $250 million in January, the filing showed.