Swire Pacific's surprise proposal to spin off its property unit for the second time could raise up to HK$30 billion in the stock market's biggest-ever property flotation.
The British hong said yesterday it was considering a separate listing for Swire Properties, which was first spun off in 1977 but privatised seven years later. 'It would definitely be the biggest property initial public offering in Hong Kong,' said a banker who specialises in new listings.
Swire Properties accounted for nearly HK$100 billion of Swire Pacific's HK$137.9 billion market capitalisation and accounted for nearly 70 per cent of the group's net earnings last year. Swire Pacific's other businesses are in aviation and beverages.
Assuming Swire sells a 25 per cent stake in its property arm, bankers said it could raise between HK$25 billion and HK$30 billion. 'It is a big surprise, particularly as Swire has been considered slow in expanding into the mainland real estate market,' said Eric Yuen Chi-fung, the head of research at Guoco Capital.
Shares in Swire Pacific fell 1.04 per cent to close at HK$95 yesterday. The Hang Seng Index fell 0.61 per cent.
Swire Pacific has been one of the least active blue chip companies in raising funds through the stock market. Since the hong joined the stock market half a century ago, its biggest deal has arguably been the delisting of Swire Properties in 1984. Two years later, Swire spun off Cathay Pacific Airways.