Strategic investors boost KWG offering
Guangdong developer KWG Property Holdings has brought in five cornerstone investors including Larry Yung Chi-kin, Lee Shau-kee and Thomas Kwok Ping-kwong, who have agreed to take 25 per cent of the shares in its HK$4.6 billion initial public offering slated for early next month, according to its preliminary prospectus.
The builder is offering 625 million new shares with an indicative range of HK$5.90 to HK$7.28 per share, according to a sale document obtained by fund managers. The offer's sponsor is also permitted to sell 93.75 million new shares if demand warrants.
Investor and Henderson Land Development chairman Mr Lee bought HK$333.3 million worth of shares though his privately held investment flagship Lee Financial. Mr Yung and Citic Pacific, of which he is the chairman, are each taking HK$166.6 million worth of shares and Sun Hung Kai Properties vice-chairman and managing director Mr Kwok is acquiring HK$150 million worth.
In addition, Li Szelim and Zhang Li, chairman and vice-chairman respectively of KWG's rival, Guangzhou R&F Properties, have agreed to buy HK$333.3 million worth of shares, the document showed.
The five have agreed not to sell their stakes for six months subsequent to the close of the offering.
Morgan Stanley is the sole bookrunner for the offering and ICEA is the joint lead manager.
Ten per cent of the offering, or 62.5 million shares, have been earmarked for Hong Kong retail investors initially, although this could increase to 50 per cent if a full clawback is triggered by oversubscriptions.
KWG kicked off its international roadshow yesterday. The order book will close on June 22.
The retail offering will run from June 18 to June 22, and trading is scheduled to begin on July 3.
As of March this year, KWG had completed five projects with a total site area of 157,002 square metres. It is now working on 10 projects with a total area of 854,887 square metres.
The firm has posted steady earnings growth for the past three years. Sources expect its profits to rise 5.2-fold to 968 million yuan this year.
