GIC's Global Logistics IPO Said to Raise $2.64 Billion

Global Logistic Properties Ltd. is set to raise S$3.45 billion ($2.64 billion) in Singapore’s biggest initial public offering since 1993, three people with knowledge of the matter said.

Shares in GLP, the overseas logistics unit of Government of Singapore Investment Corp., were priced at S$1.96 a share, the top end of a range marketed to investors, the people said on condition of anonymity.

The Global Logistic IPO will push the amount raised in Singapore equity offerings in 2010 to $5.33 billion, making it the biggest year for share sales in the city-state since 2007. Mapletree Industrial Trust, owned by a unit of Temasek Holdings Pte, plans to raise as much as S$940 million in an IPO next week.

“The momentum and sentiment should keep going, though there’s quite a number of IPOs coming through at the moment so you never know when the appetite might turn,” said Chong Yoon- Chou, Singapore-based investment director at Aberdeen Asset Management Asia Ltd., which oversaw $75 billion as of Aug. 31.

Global Logistic, which said last month it would offer 1.76 billion shares, plans to use S$1.5 billion of the proceeds to expand in China and Japan, and about S$600 million to pay down existing shareholder loans. There is an over-allotment option to expand the sale by 234.7 million shares.

Wal-Mart, FedEx

The company, whose customers include Wal-Mart China, Deutsche Post AG’s DHL and FedEx Corp., is led by Deputy Chairman and Executive Director Jeffrey Schwartz. Schwartz, 51, is a former chief executive officer of ProLogis, the world’s biggest warehouse owner. The shares of the Denver-based company dropped the most in 14 years when Schwartz resigned in November 2008.

GIC, manager of more than $100 billion of Singapore’s foreign-exchange reserves, bought the assets from ProLogis for $1.3 billion in December 2008.

Global Logistic owns, manages and leases 296 properties within 122 integrated parks, according to its prospectus. It manages and leases a gross floor area of about 6.2 million square meters (66.7 million square feet) in its network spread across 25 major cities in China and Japan, according to the document.

GIC, through its subsidiaries, will own 56.8 percent of the company after the share offering and 51.5 percent if the over- allotment option is exercised, according to the sale prospectus.

GIC IPOs

Global Logistic will be the third IPO in Asia that’s linked to GIC this year, according to publicly available reports.

The sovereign wealth fund had divested its stakes in Sunway Pyramid Shopping Mall and the Sunway Resort Hotel portfolio to a Malaysian property trust that was listed in July. GIC bought a 5 percent stake in the property trust, which raised about 1.5 billion ringgit ($484 million), Malaysia’s biggest initial public offering this year.

China Minzhong Food Corp., a food processor backed by GIC, raised S$237 million in an initial share sale in Singapore in April.

“GIC does provide a bit of the goodwill backing,” Aberdeen’s Chong said of the latest IPO. “Also, interest rates are so low right now that a lot of institutions and retail investors are looking for these kinds of yield prospects.”

Citigroup Inc. and JPMorgan Chase & Co. are leading a group of investment banks arranging the IPO, including UBS AG, China International Capital Corp. and DBS Group Holdings Ltd.

Singapore Telecommunications Ltd.’s initial offering in the city-state in 1993 raised more than S$4 billion.

To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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