Sunday, June 26, 2022
 
Columnist
Martin Hennecke

FWD gets green light, to press ahead with IPO
 
23/05/2022
 
<p>FWD, the Asian insurer backed by Hong Kong billionaire Richard Li Tzar-kai, passed its listing hearing last week and may start book-building soon.</p><p>The final listing date is yet to be decided amid a volatile market, a source said, while a spokesperson of FWD declined to comment on the market rumor.</p><p>FWD filed for an initial public offering in the city in late February this year after shelving a more ambitious plan to list in New York amid US-China tensions. The insurer had aimed to raise up to US$3 billion (HK$23.4 billion) in New York last September but the IPO size may now be reduced to US$1 billion, according to earlier media reports.</p><p>Founded in 2013, FWD is present in 10 markets across Asia and covers life insurance, health insurance, employee benefits and financial planning products. Southeast Asia contributed over 50 percent of its new business value last year.</p><p>Li, through his directly wholly-owned entity, PCGI Holdings, controls 76.90 percent of the voting rights of the company, according to the filing.</p><p>The insurer recorded a net profit of US$249 million last year compared with a loss of US$252 million in 2020, thanks to a gain in investment returns related to equities and property as well as profit from discontinued operations. New business value in 2021 rose 28 percent on an underlying basis to reach US$686 million.</p><p>FWD&#39;s quick expansion has led to relatively higher leverage. The company said it intends to use the funds raised from the IPO to enhance its solvency position and central liquidity after it reduced its leverage ratio to 34.2 percent last year from 58.2 percent in 2019.</p><p>To reduce leverage, FWD has already had two rounds of private placement financing in the last two years and repaid US$1.25 billion in debt in 2021 and US$250 million in January this year. Some of the net proceeds from the offering will also go to capital contributions to Asuransi BRI Life, which is the life insurance arm of Bank Rakyat Indonesia and in which FWD acquired a nearly 30 percent stake in 2021.</p><p>The company will also continue to seek expansion, including in mainland China, where it currently has only a representative office in Shanghai, it said in a filling. It will consider obtaining a full life insurance license in the mainland and making selective investments or acquisitions as opportunities arise, it added.</p>

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