Pacific Century downplays FWD sale, says IPO will come at ‘opportune time’ and billionaire Richard Li to keep control of insurer
- FWD’s parent, Pacific Century Group, said Li was ‘confident about the long-term development of the company’, and that it would evaluate the timing of an IPO
- FWD was reportedly considering a stake sale earlier this month at a valuation of more than US$10 billion, after its US$1 billion Hong Kong IPO was delayed again
Hong Kong billionaire Richard Li Tzar-kai will maintain his control of Hong Kong-based FWD Group Holdings amid speculation about a potential stake sale that values the regional insurer at about US$10 billion, after it struggled to raise funds through an initial public offering (IPO).
Pacific Century Group, which controls the insurer, said Li will maintain his grip on FWD, adding that the billionaire was “confident about the long-term development of the company”, according to a statement released on Sunday. The group declined to comment on the stake sale speculation.
The Asia-based private investment company said FWD has achieved an average annual growth rate of over 23 per cent during the past 10 years in terms of value of new business, a measure of the present value of future profits from policies issued during a period.
New business sales grew 22 per cent to US$1.25 billion in the nine months to September 2023, according to the latest data published on its website. The value of new business increased 21 per cent to US$724 million from the same period a year earlier.
How FWD married two of Richard Li’s ‘loves’ to create only home-grown, pan-Asian insurer
Pacific Century Group said it understands FWD’s IPO timeline is of great interest to the market, noting that the subsidiary should evaluate the timing to go public in a holistic manner, in addition to assessing the market environment.
“A premature IPO without foreseeable benefits” would negatively impact FWD’s valuation, but that an IPO remains an option for the company’s development, it added. The group will look for an “opportune moment” to list the insurer, with the goal of maximising shareholders’ interests, it said.
The statement came after FWD was reportedly considering a stake sale earlier this month at a valuation of more than US$10 billion, after its US$1 billion Hong Kong IPO plan was delayed for the second time last September.
Global insurance companies, including Toronto-based Sun Life Financial, were reportedly in talks with FWD for a potential tie-up. Should a deal materialise, FWD could use the proceeds to lower its debt load and boost profitability, Bloomberg reported, citing people it did not identify.
Li is the chairman and CEO of Pacific Century group which he founded in 1993. FWD, which has over 11 million customers across 10 markets, has attempted to go public three times in Hong Kong. The company also ditched an IPO plan in New York in 2021.
Other backers of FWD include Zurich-headquartered reinsurer Swiss Re and New York-headquartered private equity firm Apollo Global Management. FWD has raised over US$1.83 billion in private placements in 2021 and 2022, according to its website.
