Insurer FWD Group aims to raise $1 billion in Hong Kong IPO

The company logo of FWD is displayed at the lobby of a commercial building in Hong Kong
The company logo of FWD is displayed at the lobby of a commercial building where one of its offices is located in Hong Kong, China August 28, 2018. REUTERS/Bobby Yip/

SYDNEY, Feb 28 (Reuters) - Asia-focused insurer FWD Group is aiming to raise up to $1 billion in a Hong Kong initial public offering (IPO) by the middle of the year, two sources with direct knowledge of the matter told Reuters.

The Richard Li-controlled group late on Monday lodged its regulatory filings to begin the IPO with the Hong Kong stock exchange. The company's IPO prospectus did not outline the potential deal size or the launch timeline.

The company believes a mid-year listing is achievable if market conditions are favourable, the sources said. The size and timing of the Hong Kong IPO, however, could shift, they cautioned.

The sources could not be named as the information is not yet public.

FWD declined to comment.

At about $1 billion, the IPO size will be smaller than the $2 billion to $3 billion it was seeking to raise in the United States when it was initially aiming to float its business in New York.

The insurer has raised $1.6 billion in two private funding rounds since December, and that has reduced the amount that FWD needs to raise in the Hong Kong IPO, one of the sources said. read more

FWD, which has a business presence in 10 markets in Asia, made the decision in December to return its listing ambitions to Hong Kong, after it faced a lengthy wait for regulatory approval in the United States. read more

The company will also continue to explore expansion opportunities, including in mainland China, the largest life insurance market by total premium in Asia, where it currently doesn't have a business presence, it said in the prospectus.

FWD repaid $1.25 billion in debt in 2021 and $250 million repaid in January this year. Its value of new business reached $686 million for the 2021 full year, up 28% from the prior year, it said in a statement on Monday.

The insurer recorded a net profit of $249 million in 2021 after having incurred losses of $332 million and $252 million in 2019 and 2020, respectively, mainly due to an increase in investment return, the prospectus showed.

Reporting by Scott Murdoch in Sydney; Editing by Sumeet Chatterjee, David Goodman and Louise Heavens

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Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia and Australian M&A. He is based in Sydney.