Hutchison Port Holdings launches S'pore's largest IPO
Posted: 07 March 2011 1240 hrs

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SINGAPORE: Hutchison Port Holdings (HPH) Trust has launched Singapore's largest ever IPO.

The subsidiary of Hong Kong tycoon Li Ka-shing's Hutchison Whampoa plans to raise as much as S$7.3 billion (US$5.8 billion).

This will be Singapore's largest IPO, topping SingTel's S$4 billion listing in 1993.

HPH offered nearly 3.9 billion units for the IPO and some 185 million units will be issued to the public.

The offer price ranges from US$0.91 and US$1.08 per unit. However, investors subscribing for units under the public offer will pay S$1.383 per unit.

Analysts say the pricing of the units is fairly valued given the quality of the assets.

95% of the Trust's assets sit with ports in Hong Kong and Shenzhen.

HPH said eight cornerstone investors including Temasek Holdings unit Aranda Investments have agreed to invest US$1.6 billion.

Based on the price range, the Trust said implied Distribution per Unit (DPU) yield for 2011 is between 5.5% and 6.5%, and the implied DPU yield for 2012 is between 6.1% and 7.2%.

The Trust, which is the first publicly traded container port business trust, registered its prospectus with the Monetary Authority of Singapore (MAS) on Monday.

The public offer opens at 12 noon on March 7 and closes on March 14. The units are expected to start trading on SGX at 2pm on March 18. DBS Bank, Deutsche Bank AG and Goldman Sachs Singapore are the joint bookrunners and joint issue managers for the IPO.

Increased trade within ASEAN is one of the growth drivers for the port business in Asia. With increasing trade, some 10 million standard containers (TEUs) passed through HPH Trust's Hong Kong and Shenzhen operations - and this number is expected to grow by around 9% in the coming year.

The Trust will use funds raised from its IPO to fund expansion of current operations - such as the phase three development of Yantian International Container Terminals (YICT) in Shenzhen.

The Trust's investment mandate is principally to invest, develop and operate deep-water container ports, but the Trust may also invest in other types of port assets such as river ports.


- CNA/fa/ir