FWD's US$2b IPO hit amid SEC scrutiny

Finance | Bloomberg and Victor Zhong 20 Oct 2021

Billionaire Richard Li Tzar-kai's US initial public offering of his Asian insurance group, FWD Group, is stalling amid regulators' increasing unease over the long arm of the Chinese government, Bloomberg reported, citing people with knowledge of the matter.

The acquisitive insurer so far hasn't been able to secure final approval from the US Securities and Exchange Commission for the listing, the people said,.

The SEC has been asking the company about risks such as whether the Chinese government could extend its authority to Hong Kong-based firms like FWD, the people said.

The IPO was expected to raise about US$2 billion (HK$15.6 billion) to US$3 billion, Bloomberg News has reported. FWD was earlier targeting to start trading in New York this week, the people said. While it hasn't formally withdrawn its share sale plans, the listing looks increasingly unlikely to be completed this year, according to the people.

The insurer has also faced pushback from some investors on concerns about the regulatory risks and valuation, according to the people. Representatives for FWD and the SEC declined to comment.

In other news, Volvo Car is looking to raise 25 billion kronor (HK$22.58 billion) in a Stockholm initial public offering in a test for automakers amid the sector's transition to electric vehicles.

The Swedish carmaker, owned by China's Zhejiang Geely Holding, is offering shares at 53 kronor to 68 kronor each,

The deal values Volvo Cars at as much as US$23 billion, 11 years after the Chinese firm bought the business from Ford Motor for US$1.8 billion. The IPO is set to be Europe's largest since January, according to data compiled by Bloomberg.

The carmaker, with an ambitious plan to only sell full electric cars by 2030, plans to use the funds to add carmaking capacity so it can nearly double annual sales to more than 1.2 million vehicles. Volvo Cars also plans to construct a battery plant in Europe.

Meanwhile, Dalian Wanda Commercial Management Group has received the green light from the mainland equity regulator to submit a listing application to Hong Kong Exchanges and Clearing (0388) shortly.

In March, the firm announced it was withdrawing its A-share listing and reorganizing its light asset operation business after halting a five-year pursuit to list its real-estate business on mainland bourses.



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