Two Companies to List Equity as Largest Backdoor Listing in Hong Kong
CITIC Group Corp is planning to list their main operating arm in Hong Kong by reversing their CITIC Pacific subsidiary through a deal that valued the combined listed groups totaling US$ 42 billion. The steel to property CITIC Pacific listed in Hong Kong is planning to purchase 100 percent of CITIC Ltd. which is its main operation arm using a combination of new shares and cash.
CITIC Pacific will then issue an undisclosed number of shares at HK$13.48 which is equivalent of 6.5 percent premium against its closing last Monday of HK$12.66 which is also subjected to a definitive agreement. CITIC Ltd. total equity is around 225 billion yuan by the end of 2013, and together with CITIC Pacific equity that is valued at more the US$ 5 billion and combining both it will bring its worth to US$ 42 billion turning it as the biggest backdoor listing in Hong Kong.
By moving to Hong Kong is said to be the most significant step done by the Central Government controlled enterprise in a campaign that is meant to further restructure China’s State owned companies. Furthermore CITIC Pacific stated that once the acquisition is complete, it will make it s stronger company that have a much larger shareholder equity, deeper managerial skills and a broader range of businesses. These will also enhance the companies competitiveness and its ability in capturing the growth in economic opportunities in China.