Li Ka-Shing’s real estate investment trust (REIT) has begun to gauge investors’ interest in Hong Kong’s first yuan-denominated initial public offering (IPO).
Called Hui Xian, the REIT will sell approximately 2.7 billion current shares (40 percent of the company) in the IPO, providing the stock a market capitalisation of approximately 28 billion yuan (S$5.4 billion). Around 80 percent of the shares will be offered to institutional investors, while the rest will likely go to Hong Kong retail investors.
The sale might lead other Hong Kong developers to follow with similar bids, as Hong Kong Exchanges & Clearing Ltd attempts to expand its product offerings in the region.
Charles Li, HKEx Chief Executive Officer, has proposed approving yuan-denominated share sales in the city. In January, yuan deposits at Hong Kong banks achieved a record 370.6 billion, according to the Hong Kong Monetary Authority.
The IPO is supported by the Oriental Plaza property in central Beijing, which covers 100,000 sq m and is located along Beijing’s Changan Avenue. It comprises eight premium office buildings, a Grand Hyatt Hotel, a shopping mall and serviced apartments.
Oriental Plaza Cheung Kong Holdings Ltd is owned and managed by Li Ka-Shing, who owns 33.4 percent of Oriental Plaza, while partner Hutchison Whampoa Ltd manages 18 percent, according to the companies’ 2009 year-end report.
Citic Securities International Co, HSBC Holdings plc and BOC International Holdings Ltd are managing the IPO.
The IPO managers are set to take share orders from 30 March to 11 April and a listing is expected to start on 19 April.