Hutchison Port Holdings Trust IPO

Hong Kong billionaire tycoon Li Ka-Shing is launching a IPO in Singapore. The Hutchison Port Holdings Trust IPO, Southeast Asia's biggest ever, comes at a time when sea-borne trade in Asia is swelling and global container shipping firms are putting more ships and resources to serve Asian routes from Europe and North America. The assets of the Hutchison’s subsidiary, Hutchison Port Holdings Trust, are located in Hong Kong and Shenzhen, two of the world’s busiest container ports in 2009 with a total throughput of 39.2 million twenty-foot equivalent units, the prospectus showed.

Some of the cornerstone investors for Hutchison Whampoa Ports include heavyweights like Capital Research and Temasek Holdings. Capital Research will invest US$634 million in the offering, according to the term sheet. Paulson & Co., managed by John Paulson, will buy a US$350 million stake and Lone Pine Capital LCC will invest US$186 million, it said. Jenkin Hui and family, Singapore’s Temasek Holdings, Cathay Life Insurance Co. and Metropolitan Financial Services will each invest US$100 million, and Ally Holding Ltd. will buy a US$50 million stake.

The offer price ranges from US$0.91 and US$1.08 per unit. Investors subscribing for units under the public offer will need to pay S$1.383 per unit upfront. If the final offer price is less than US$1.08, they will get the appropriate refund. The 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 public offer opens at 12 noon on 7th March 2011 and closes on 14th March 2011 at 10am. The units are expected to start trading on SGX at 2pm on 18th March 2011.