HONG KONG – Hong Kong billionaire Richard Li’s FWD insurance business is heading for an initial public offering in the US, according to a confidential document from its controlling group.
FWD, which has acquired businesses in Hong Kong, Indonesia, Vietnam and Thailand in recent years, aims to raise about $3 billion through a third-quarter IPO with a valuation of more than $15 billion, two people said. familiar with the plan. The company intends to use the funds for expansion and acquisitions, they said.
One of the reasons the company chose the US before Hong Kong was because it has a two-class ownership structure, one of the people said, which is allowed in the US and could allow Li to retain control of the vote. Hong Kong’s listing rules only allow weighted voting rights for innovative companies, an exception for which FWD, as an insurer, does not qualify, they said.
PCGI Intermediate Holdings Ltd., the holding company of FWD and FWD Group, said it has “confidentially filed a draft registration statement” with the US Securities and Exchange Commission “in connection with a proposed initial public offering.”
Li’s exact position in the two entities is not known. But based on previous bond offering circulars, Li owns 79.3% of FWD, which serves Hong Kong and Macau, and 76.3% of FWD Group, which operates in Southeast Asia and Japan.
The plan for a US offering comes with US IPO volumes already hitting an annual record. The IPOs raised $171 billion, surpassing last year’s record of $168 billion, according to Dealogic. Chinese companies are also returning to the US after a lull in April and May, with Uber’s national service, Didi Chuxing, planning about $10 billion this month, people familiar said.
An IPO will end some hectic years for FWD. Last year, the company completed the acquisition of two Metlife units in Hong Kong, Vietcombank-Cardif Life Insurance in Vietnam and PT Commonwealth Life in Indonesia. In 2019, it agreed to pay about $3 billion for the life insurance operations of the Siam Commercial Bank of Thailand.
It has 9.8 million customers, 6,100 employees and $62.6 billion in assets across 10 markets in Asia, according to a company report. FWD offers life insurance, medical, general insurance, employee benefits and some property protection products.
It is part of the investment firm Pacific Century Group, which focuses on technology, media and telecommunications, financial services and property. The insurance business has Swiss Re, RRJ Capital, Hopu Investment and GIC Ventures among its minority shareholders.
FWD has not released valuation targets and said the price range or number of shares to be issued has yet to be determined. An IPO is expected to take place after the US Securities and Exchange Commission completes its review and is subject to market conditions, the agency said.