China's State Grid buys biggest chunk of HK Electric's IPO
Li's Power Assets Holdings Ltd is planning to list its Hong Kong electricity business, HK Electric Investments, as it seeks funds for overseas expansion
Government-owned State Grid Corp of China is coming in as the biggest cornerstone investor in Li Ka-shing-backed HK Electric Investments’ up to US$5.7 billion Hong Kong initial public offering (IPO), according to people familiar with the matter .
Li’s Power Assets Holdings Ltd is planning to list its Hong Kong electricity business, HK Electric Investments, as it seeks funds for overseas expansion. The IPO is set to be launched on Monday, they added.
Depending on the final IPO pricing, State Grid will end up owing more than 15 per cent of HK Electric Investments after the IPO, set to be the biggest in Hong Kong since AIA Group Ltd’s US$20.5 billion deal in 2010.
Cornerstone investors, including State Grid, are committing around 35 per cent, or about US$2 billion based on the upper end of the IPO estimates, one person said. The final size of the fundraising will depend on the eventual IPO price, which will be determined through a book-build process.
Sources declined to be identified as the information is not public. Power Assets and State Grid cold not be reached for comments immediately.