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Exclusive: China Everbright Group to restructure, pursue billion-dollar Hong Kong IPO - sources

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Exclusive: China Everbright Group to restructure, pursue billion-dollar Hong Kong IPO - sources
The company logo of China Everbright Limited is displayed at a news conference on the company's annual results in Hong Kong, China March 23, 2016. REUTERS/Bobby Yip/Files   -   Copyright  Bobby Yip(Reuters)
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By Engen Tham and Julie Zhu

SHANGHAI/HONG KONG (Reuters) – State-owned financial conglomerate China Everbright Group aims to restructure its sprawling business and pursue a billion dollar IPO next year in Hong Kong, three people with direct knowledge of the matter told Reuters on Thursday.

While the offering size has yet to be finalised, the initial public offering (IPO) will likely be at least in the billion-dollar bracket, two of the people said. The third person estimated that Everbright, backed by sovereign wealth fund subsidiary Central Huijin Investment Ltd and China’s Ministry of Finance, could raise up to $3 billion.

The Fortune 500 company has recently hired U.S. investment bank JPMorgan Chase & Co and Chinese peers China International Capital Corp Ltd (CICC) and CITIC Securities Co Ltd as restructuring advisers, the people said.

The advisers will help the group – with businesses as varied as banking, insurance, aircraft leasing and environmental protection services – to finalise details, such as what assets will be listed and under which entity, two of the people said.

Everbright Group, JPMorgan, CICC and CITIC Securities did not respond to requests for comment. The three people declined to be identified as the information was not public.

Beijing-based Everbright has been exploring IPO plans since the first half of the year and has been asking another state-owned conglomerate, CITIC Group Corp, for guidance and advice, said one of the people.

The group decided to list in Hong Kong rather than Shanghai partially because the process is shorter and there are fewer uncertainties, the person said.

Like many heads at Chinese state-owned enterprises, Everbright Chairman Li Xiaopeng who joined the group in December 2017 from another state-backed conglomerate, China Merchants Group Ltd, is a senior Communist Party official.

One of the people said a successful IPO would likely help Li, 60, climb further up the ranks of the Party.

Everbright’s IPO pursuit in Hong Kong comes as Asia’s top financial hub looks to be back in business with companies forging ahead with listing plans after a freeze during months of frequently violent anti-government protests.

Budweiser Brewing Company APAC Ltd last month raised about $5 billion in Hong Kong, in this year’s second-largest IPO worldwide.

On Thursday, Chinese sportswear manufacturer Topsports International Holdings Ltd debuted on the Hong Kong stock exchange after raising $1.01 billion.

Everbright, one of mainland China’s oldest and biggest financial conglomerates, was founded in Hong Kong in 1983, early in China’s economic reform era.

The group now has registered capital of 60 billion yuan ($8.41 billion) and about 11 stock market-listed entities including China Everbright Bank Co Ltd, Everbright Securities Co Ltd and asset manager China Everbright Ltd.

(Reporting by Engen Tham in Shanghai and Julie Zhu in Hong Kong; Editing by Christopher Cushing)

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