China Everbright Group to pursue Hong Kong IPO: report

October 10, 2019 13:53
China Everbright Group could raise up to US$3 billion in the share offering, sources said. Photo: Reuters

State-owned financial conglomerate China Everbright Group aims to restructure its sprawling business and pursue a billion-dollar IPO next year in Hong Kong, Reuters reports, citing three people with direct knowledge of the matter.

While the offering size has yet to be finalized, the initial public offering (IPO) will likely be at least in the billion-dollar bracket, two of the people said. The third person estimated that Everbright, backed by sovereign wealth fund subsidiary Central Huijin Investment Ltd. and China’s Ministry of Finance, could raise up to US$3 billion.

The Fortune 500 company has recently hired US investment bank JPMorgan Chase & Co and Chinese peers China International Capital Corp. Ltd. (CICC) (03908.HK) and CITIC Securities Co. Ltd. (600030.CN) as restructuring advisers, the people said.

The advisers will help the group – with businesses as varied as banking, insurance, aircraft leasing and environmental protection services – to finalize details, such as what assets will be listed and under which entity, two of the people said.

Everbright Group, JPMorgan, CICC and CITIC Securities did not respond to requests for comment. The three people declined to be identified as the information was not public.

Beijing-based Everbright has been exploring IPO plans since the first half of the year and has been asking another state-owned conglomerate, CITIC Group Corp., for guidance and advice, said one of the people.

The group decided to list in Hong Kong rather than Shanghai partially because the process is shorter and there are fewer uncertainties, the person said.

Like many heads at Chinese state-owned enterprises, Everbright chairman Li Xiaopeng who joined the group in December 2017 from another state-backed conglomerate, China Merchants Group Ltd., is a senior Communist Party official.

One of the people said a successful IPO would likely help Li, 60, climb further up the ranks of the party.

Everbright’s IPO pursuit in Hong Kong comes as Asia’s top financial hub looks to be back in business with companies forging ahead with listing plans after a freeze during months of frequently violent anti-government protests.

Budweiser Brewing Company APAC Ltd. (01876.HK) last month raised about US$5 billion in Hong Kong, in this year’s second-largest IPO worldwide.

On Thursday, Chinese sportswear manufacturer Topsports International Holdings Ltd. (06110.HK) debuted on the Hong Kong stock exchange after raising US$1.01 billion.

Everbright, one of mainland China’s oldest and biggest financial conglomerates, was founded in Hong Kong in 1983, early in China’s economic reform era.

The group now has registered capital of 60 billion yuan (US$8.41 billion) and about 11 stock market-listed entities including China Everbright Bank Co. Ltd. (601818.CN), Everbright Securities Co. Ltd. (601788.CN) and asset manager China Everbright Ltd. (00165.HK).

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