Haier Smart Home plans Hong Kong listing to take $7.7bn unit private

The Haier group was founded in 1984 by Chinese businessman Zhang Ruimin. (Reuters)
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Updated 12 December 2019

Haier Smart Home plans Hong Kong listing to take $7.7bn unit private

  • Haier Smart Home would offer minority shareholders in unit Haier Electronics Group newly issued Hong Kong stock for their shares
  • Haier Electronics makes and sells appliances such as washing machines

HONG KONG: Haier, the world’s biggest maker of household appliances, is planning a major restructuring that will see its main unit Haier Smart Home list in Hong Kong to take another group company valued at $7.7bn private, two people with direct knowledge of the matter said.
Under the deal, Haier Smart Home, formerly known as Qingdao Haier and already listed in Shanghai, would offer minority shareholders in unit Haier Electronics Group newly issued Hong Kong stock for their shares, they said.
Financial advisers have been hired to work on the deal, which would give Haier Smart Home access to cash at Haier Electronics, the sources said, declining to be identified as negotiations were private.
Haier Electronics, which makes and sells appliances such as washing machines, held about 20bn yuan ($2.8bn) in cash and short term investments as of end-June, according to Refinitiv.
One of the sources added the plan was also part of the Haier group’s efforts to streamline its overseas operations.
Haier Smart Home currently owns 45% of Haier Electronics and unlisted parent Haier Group Corp. holds 12%, while minority shareholders include Vanguard Group, Norges Bank Investment Management and BlackRock, according to Refinitiv data.
The plan is still preliminary and would be subject to regulatory approval, the sources said, adding that the aim was to complete the deal in the second half of next year.
A representative from Haier Smart Home’s investors relations office said the team was not aware of the plan. Haier Group and Haier Electronics did not respond to requests for comment.
The Haier group was founded in 1984 by Chinese businessman Zhang Ruimin who built up a small loss-making factory into a major consumer brand. Major acquisitions have included New Zealand appliances brand Fisher & Paykel in 2012 for NZ$927 million and the $5.6bn purchase of General Electrics’ appliances business in 2016.
Haier Smart Home, which has a market value of some $15.4bn, also listed in Germany last year — the first listing of a Chinese company under the D-share program aimed at increasing foreign investment in Chinese firms.
Hong Kong-listed companies have announced a record 24 take-private deals this year, often citing uncertain market conditions or undervalued shares as reasons for the deals.


Indonesia sells Asia’s first 50-year dollar bond to fight pandemic

Updated 07 April 2020

Indonesia sells Asia’s first 50-year dollar bond to fight pandemic

  • Indonesia will use the cash raised to partially ‘fund its COVID-19 relief and recovery efforts’
  • The deal was carried out virtually, with bankers working on the transaction unable to travel to Jakarta

HONG KONG: Indonesia has raised $4.3 billion, including the longest-dated US dollar bond ever issued by an Asian nation, to help the government fund its battle against coronavirus, according to a term sheet reviewed by Reuters.
The deal was finalized in the United States on Monday and sold in maturities of 10.5 years and 30.5 years, worth $1.65 billion each, with a 50-year tranche worth $1 billion.
It was Indonesia’s largest-ever bond, according to the term-sheet which showed Indonesia will use the cash raised to partially “fund its COVID-19 relief and recovery efforts.”
The decision to sell 50-year bonds by the government came after initial conversations with potential investors found there was appetite for such a tenor, according to two sources with direct knowledge of the matter.
Asian life insurers, especially some based in Taiwan as well as US fund managers were the largest investors, the sources said. The sources could not be named because they were not authorized to speak to media.
“The mood in the market is starting to feel better, investors are starting to think we could be moving toward the end of the tunnel,” a banker working on the deal said.
The deal was carried out virtually, with bankers working on the transaction unable to travel to Jakarta which would have been normal practice.
Bankers working on the deal said the international travel ban put in place to control the coronavirus pandemic made the transaction more efficient to negotiate.
However, for syndicate bankers selling the deal to investors it was logistically more difficult because trading rooms in the major banks have been scaled back.
Indonesia’s coronavirus cases stood at 2,491 on Monday, with 209 confirmed deaths — the highest number of fatalities in Asia outside China.
Fifty-year bond deals priced in local currencies have been held in the past, Refinitiv data showed. South Korea raised 1.1 trillion won through a 50-year bond in September 2016 that at the time was worth $1 billion.
Indonesia’s government said on Monday it had raised its estimated 2020 net bond issuance to 549.6 trillion rupiah ($33.55 billion) to cover the country’s widening deficit.
It also listed a plan for sales of 449.9 trillion-rupiah ($27.47 billion) worth of “pandemic bonds” to cover additional spending for the COVID-19 response.
Citigroup, Deutsche Bank, Goldman Sachs, HSBC and Standard Chartered were the joint book runners for the deal, the term-sheet showed.