Hong Kong declines Morgan Stanley-backed broker’s IPO bid

Morgan Stanley-backed broker one of only six firms to be rejected from listing in almost four years

Hong Kong declines Morgan Stanley-backed broker’s IPO bid

Insurance News

By Gabriel Olano

The Hong Kong Stock Exchange has rebuffed the application for initial public offering (IPO) of AMTD Strategic Capital Group, a corporate insurance broker with the backing of Morgan Stanley's private equity arm.

This firm is only the sixth company that has been rejected by the bourse in almost four years.

AMTD Strategic Capital filed its IPO application in May, and according to Thomson Reuters data, it was expected to be worth US$200 million.

The Hong Kong stock exchange did not specify any reason why they rejected AMTD’s bid to go public, but this could have something to do with the stricter listing rules it introduced in 2014 in an effort to improve the quality of listings.

The new rules state that the regulator can single out IPO sponsors and issuers with incomplete applications and ban them from refiling the documents for eight weeks. Banks can also be held criminally liable if they come out with a misleading IPO prospectus.

AMTD Asia, which is owned by Morgan Stanley Private Equity Asia (MSPEA), holds 79% of AMTD Strategic Capital. Other investors include L.R. Capital Group and China Minsheng Investment Corp, which is China's largest privately owned investment company.

China Everbright Capital Ltd and China Merchants Securities were named as joint sponsors of the IPO, according to the prospectus.

This year, AMTD Strategic Capital has raised US$34 million from seven investors to fund business expansion efforts. Aside from Morgan Stanley, these include real estate development firm Indochina Capital, an affiliate of Sohu.com, and an investment holding firm linked to the co-founder of mobile photography app Meitu.

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HDFC Life may abandon Max merger, go for IPO instead
Manulife looks at possible IPO or spinoff of American unit
Online-only insurer ZhongAn Online Property and Casualty Insurance planning $1.5 billion listing

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