(Adds details, background, Hong Kong IPO volume data, CVC)
HONG KONG, April 3 Sun Hung Kai & Co Ltd
has appointed three banks to underwrite the sale of
its consumer finance division, people familiar with the matter
told Reuters on Thursday.
Sun Hung Kai's move to spin off United Asia Finance Ltd
(USF) into a separate, listed entity comes amid strong demand
for Hong Kong banking assets. The move also comes amid a
resurgence in Hong Kong IPO and equity capital market volumes.
Sun Hung Kai chose JPMorgan Chase & Co, Morgan
Stanley and UBS AG to run the sale of UAF,
which is expected to value the business at around $3 billion,
the people said.
"The consideration of a potential separate listing of UAF
remains at a preliminary stage," the company said.
JPMorgan, Morgan Stanley and UBS declined to comment.
Separating UAF as a listed entity would allow its parent to
better capture the recent demand for Hong Kong banking
Singapore's Oversea-Chinese Banking Corp Ltd
announced a $4.95 billion offer for Hong Kong family run lender
Wing Hang Bank on Tuesday. Yue Xiu Group, the trading
arm of China's Guangzhou city government, agreed last October to
buy three-quarters of Hong Kong's Chong Hing Bank Ltd
for about $1.5 billion.
Sun Hung Kai bought UAF in 2006. In 2010 Sun Hung Kai raised
about $278 million after selling a 19 percent stake in itself to
private equity firm CVC Capital Partners, with most of
the funds going for the expansion of UAF in mainland China.
UAF had about 30 branches in mainland China at the time of
the CVC investment, growing to 105 by the end of 2013. The
consumer finance business, with a loan book of more than HK$10
billion ($1.3 billion) at the end of last year, also had 49
branches in Hong Kong.
Hong Kong IPO volumes in the first quarter totalled $5.9
billion, up from the $1.03 billion a year ago, according to
ThomsonReuters data. Several large deals are expected to float
this year in Hong Kong, a boost to the city's former world
leading IPO market, which suffered from a steep slowdown last
(Reporting by Stephen Aldred; Additional reporting by Elzio
Barreto and Yimou Lee; Editing by Michael Flaherty, Christopher
Cushing Matt Driskill)