By Scott Murdoch
HONG KONG (Reuters) -Asia-focused insurer FWD Group has raised $1.4 billion via a private placement of shares, according to a company statement on Tuesday, ahead of its long-planned initial public offering (IPO) which two sources said will now be carried out in Hong Kong.
A decision to shift to Hong Kong was made after regulatory approval for FWD’s planned U.S. IPO of $2 billion to $3 billion was delayed.
The company received preliminary approval last week from the Securities and Exchange Commission (SEC) to carry out a marketing roadshow to investors but still required full sign-off from regulators, according to the sources.
The sources could not be named as the information was not yet public. FWD declined to comment on the Hong Kong IPO shift.
Founder Richard Li’s weighted voting rights will be dropped to allow FWD to meet Hong Kong’s listing rules which only permit companies deemed as innovative to have that share structure, the sources said.
The size and time frame of the Hong Kong IPO has yet be determined, the sources said.
The lacklustre share price performance of Chinese companies listed in the United States, led by Didi Global Inc, prompted the company to switch its listing to Hong Kong.
FWD will be valued at $9 billion on a post-money basis, the sources said.
The Hong Kong-based insurer, controlled by billionaire Li, finalised the deal early on Tuesday which is led by investors Apollo Global Management and Canada Pension Plan Investment Board (CPPIB), according to a statement on Tuesday.
The other investors include Swiss RE, the Li Ka Shing Foundation, Li’s Pacific Century Group, Siam Commercial Bank and Metro Pacific Investment Corp (MPIC) from the Philippines, the statement said.
FWD plans to use the cash from the private share sale to grow its business and reduce leverage, according to the statement.
With the new funding in place, it is likely the Hong Kong IPO would be smaller than the planned U.S. deal, one of the sources said.
(Reporting by Scott Murdoch in Hong Kong; Editing by Stephen Coates and Christopher Cushing)
