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IPO

Hong Kong billionaire Richard Li's insurance unit seeks US IPO

FWD targets fundraising of about $3 billion for further acquisition plans

FWD, a Hong Kong-based insurer backed by Richard Li, has filed confidentially for a U.S. initial public offering. (Source photos by Reuters)

HONG KONG -- Hong Kong billionaire Richard Li's insurance business FWD is heading for a U.S. initial public offering, according to a confidential filing by its parent holding group.

FWD, which has acquired businesses in Hong Kong, Indonesia, Vietnam and Thailand in recent years, is targeting raising about $3 billion via an IPO in the third quarter at a valuation in excess of $15 billion, two people familiar with the plan said. The company intends to use the proceeds for expansion and acquisitions, they said.

One reason the company picked the U.S. ahead of Hong Kong was because it has a dual-class share structure, one of the people said, which is permitted in the U.S. and could allow Li to retain voting control. Hong Kong's listing rules only allow weighted voting rights for innovative companies, an exception that FWD, as an insurer, does not qualify for, they said.

PCGI Intermediate Holdings Ltd., the holding company of FWD and FWD Group, said it "has confidentially submitted a draft registration statement" with the U.S. Securities and Exchange Commission "relating to a proposed initial public offering."

The exact holding of Li 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 U.S. offering comes as IPO volumes in the U.S. have already surged to an annual record. IPOs have raised $171 billion, eclipsing last year's record $168 billion, according to Dealogic. Chinese companies are also flocking back to the U.S. after a lull in April and May with the nation's Uber-like service Didi Chuxing eyeing about $10 billion as early as this month, people familiar have said.

An IPO will round off a busy few years for FWD. The company last year 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 Thailand's Siam Commercial Bank.

It has 9.8 million customers, 6,100 employees and $62.6 billion in assets across 10 markets in Asia, according to a company fact sheet. FWD offers life, medical, general insurance, employee benefits and some wealth protection products.

It is part of investment company Pacific Century Group, which focuses on technology, media and telecom, financial services and property. The insurance business counts Swiss Re, RRJ Capital, Hopu Investment and GIC Ventures among its minority shareholders.

FWD did not disclose valuation targets and said the price range or the number of shares to be issued has not yet been determined. An IPO is expected to take place after the U.S. Securities and Exchange Commission completes its review and is subject to market conditions, it said.

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