HONG KONG | Tue Nov 22, 2011 9:15pm EST
(Reuters) – PCCW Ltd’s (0008.HK) telecom business spinoff, HKT Trust, is raising $1.2 billion in an Hong Kong IPO, pricing the deal at the bottom end of an indicative range as global market turmoil dented demand despite the high yield offered.
PCCW said in statement on Wednesday that HKT Trust’s initial public offering was priced at HK$4.53 per share-stapled unit, the bottom of an indicative range of HK$4.53 to HK$5.38.
HKT Trust offered 2.05 billion share-stapled units, putting the total deal at HK$9.3 billion ($1.2 billion), the biggest Hong Kong offer since Citic Securities Co Ltd (6030.HK) raised $1.7 billion in September. The units (6823.HK) will start trading on November 29.
Three sources with direct knowledge of the deal told Reuters late on Tuesday PCCW’s HKT Trust was set to price its IPO at the bottom of an indicative range.
Controlled by Hong Kong tycoon Richard Li, PCCW launched the IPO on November 9. HKT Trust, which will become the first single investment trust to list in Hong Kong, was offered at an attractive 2012 yield of 7.5-8.9 percent. At the offer price, the units will have 2012 yield of 8.9 percent.
However, Hong Kong retail investors, who care more about the first-day pop of IPOs, shied away from the offer, while institutional investors were generally cautious on the poor performance of some big listings this year and HKT Trust’s rich valuations.
“Despite the very challenging economic environment and financial markets during the roadshow, HKT has attracted a broad list of globally renowned institutional investors who appreciate the high quality, defensive nature of HKT,” Alexander Arena, PCCW’s group managing director, said in a statement.
The trust consists of the telecoms business of PCCW and was spun off, but the structure will help Li retain a majority of the business.
China International Capital Corp, Deutsche Bank (DBKGn.DE), Goldman Sachs (GS.N) and HSBC (HSBA.L)(0005.HK) were hired as joint global coordinators for the offering, with JPMorgan (JPM.N), Standard Chartered (STAN.L) (2888.HK) and Singapore’s DBS (DBSM.SI) also helping to underwrite the deal.
($1 = 7.792 Hong Kong dollars)
(Reporting by Donny Kwok; Editing by Jonathan Hopfner and Matt Driskill)
Jacqueline Tongko 