Hong Kong’s Richest to Underwrite $1.1 Billion of HSBC’s Offer

Discussion in 'Wall St. News' started by ASusilovic, Mar 3, 2009.

  1. March 3 (Bloomberg) -- Billionaire Li Ka-shing, Hong Kong’s richest man, and a group of fellow tycoons are underwriting about $1.1 billion of HSBC Holdings Plc’s stock sale, lending support in a city that accounts for a third of the bank’s investor base.

    Li, Lee Shau-kee, Joseph Lau and Cheng Yu-tung, who between them have a combined wealth of $33 billion according to Forbes magazine, will underwrite HSBC’s offer to sell shares to existing investors at 254 pence apiece, said their representatives. Equivalent to HK$28, that is almost half the value HSBC’s Hong Kong-listed shares closed at on Feb. 27, the last trading day before the sale was announced.

    HSBC, founded in Hong Kong more than 140 years ago, is so synonymous with the city of 7 million people that residents refer to it simply as “the bank.” Based in London and with operations in 86 countries and territories, HSBC gets most of its profit from Asia and is Hong Kong’s largest provider of mortgages.

    Should HSBC’s operations deteriorate, the tycoons “will be prepared for an exit,” said Winson Fong, who helps manage $2 billion at SG Asset Management H.K. Ltd. in the city. “They are very rich people, and you shouldn’t use them as reference unless your pockets are the same size as theirs.”

    Fong, who said his comments reflect his personal views, not his firm’s, wouldn’t say whether SG would subscribe to the offer. HSBC spokesman David Hall declined to comment.

    HSBC, Europe’s biggest bank by market value, plans to raise 12.5 billion pounds in the U.K.’s biggest rights offering, after 2008 profit fell 70 percent. It joins Standard Chartered Plc and DBS Group Holdings Ltd. in turning to existing investors to shore up balance sheets battered by the global recession.

    Li ‘Confident’

    HSBC will pay arrangers Goldman Sachs Group Inc., JPMorgan Chase & Co. and eight other firms 2.75 percent in fees from the money the London-based bank plans to raise.

    Li, who has a net worth of $16.2 billion according to Forbes, will underwrite about $300 million of HSBC’s offer because he is “confident” in the bank, said Winnie Cheong, a spokeswoman at his flagship company, Cheung Kong (Holdings) Ltd. Li is underwriting the sale in his personal capacity, she said.

    Lee, chairman of Henderson Land Development Co., Hong Kong’s fifth-largest real estate developer, will underwrite HK$2.34 billion of the offer, company spokeswoman Bonnie Ngan said today.

    In Lee’s opinion, HSBC’s announcement that it will scale back U.S. consumer lending operations is a “positive move, and HK$28 is very cheap,” Ngan said. Forbes Asia ranked Lee as Hong Kong’s third-richest man, with a net worth of $9 billion.


    I AM impressed.:)
  2. I'm not impressed. Buffett backstopped a ($40) rights offering on USG when it traded at >100. In 6 months the stock traded at $40. The rights offering is dilution plain and simple and conspicously absent is Li's intentions and motive. Face it, he is wealthy enough to organize his own bank,
  3. chinese pple are rich rich rich:D
  4. [​IMG]