Hong Kong broadband provider launches IPO
HKBN, Hong Kong’s second-largest broadband service provider, launches its initial public offering on Tuesday, raising up to US$750 million in the city’s first major deal of the year.
Private equity firm CVC Capital Partners, which owns a 70.7 per cent stake in the company, HKBN’s management and other investors will offer 645 million existing shares at an indicative range of HK$8 to HK$9 apiece, offering an expected yield of 5.4 per cent.
The company would not receive any proceeds from the IPO.
HKT Trust shares, which offer an average yield of 5 per cent, rose 28 per cent in the past year, reflecting appetite for high-yield stocks in the low-interest rate environment.
The Richard Li-owned company runs the city’s biggest fixed-line and residential broadband and telecommunications network.
HKBN has already secured a US$200 million order from Canada Pension Plan Investment, representing about 27 per cent of the entire deal.
If the company prices the shares at the top end of the indicative range, it will be the second-biggest listing in the Asia-Pacific region this year, after Thai telecommunications operator Jasmine International’s initial public offering of its broadband internet business that raised US$1.13 billion in early February.
The company will price the shares on March 4 and the shares will begin trading on March 12.
CVC bought HKBN from Hong Kong Television Network in May 2012 for HK$4.9 billion, according to its listing documents. The London-based private equity firm raised US$40 million in August by selling an undisclosed amount of ordinary and preference shares to a unit of Singapore’s sovereign wealth fund GIC for an 11.3 per cent stake and another US$29 million to Carlyle for 8.14 per cent.
Goldman Sachs, JPMorgan and UBS are handling the IPO.
