Brewing king eyes HK for Asia float

Business | Reuters and Avery Chen 10 Apr 2019

Anheuser-Busch InBev, the world's largest brewer, may apply to the Hong Kong Stock Exchange as early as this month for a listing of its Asian operations this summer, aiming to raise up to US$5 billion (HK$39 billion), reports Reuters IFR.

Its Asian business is valued at about US$70 billion. In October last year, the Asia-Pacific region accounted for 20 percent of volume and 15 percent of AB InBev's underlying profit.

The Belgium-based maker of Budweiser intends to use most of the net proceeds from the flotation to repay debt.

The company, which paid about US$100 billion for nearest rival SABMiller in 2016, announced last October that it would be cutting its proposed dividend in half after beer sales fell in its largest markets of the United States and Brazil.

AB InBev is targeting a return to a net debt to EBITDA ratio of two times. Trevor Stirling, analyst at Bernstein Research, estimated that this multiple was 4.7 at the end of 2018 and would fall to 4.3 at the end of 2019 and 3.7 at the end of 2020.

Meanwhile, Easyknit International (1218) announced that the Hong Kong exchange has decided to reject its proposed spin-off because the company does not satisfy the requirements of practice note 15 of the listing rules on spin-offs.

Hong Kong Exchanges and Clearing (0388) and the People's Government of Hebei Province signed a memorandum of understanding yesterday to further strengthen cooperation to facilitate IPOs, debt financing and mergers and acquisitions of Hebei companies.

In other news, Saudi Aramco, the world's largest oil company, has received US$85 billion in orders for its debut bond sale, an offering where yields may fall in line or below Saudi Arabia's sovereign debt.

As part of its debut in the global debt market, Aramco has offered bonds in six portions, from three to 30 years, and is expected to raise between US$10 billion and US$15 billion. Final pricing and size was due to be revealed yesterday.

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