Swire Pacific Ltd., the Hong Kong commercial landlord and owner of the city’s biggest airline, is considering a spinoff and listing of Swire Properties Ltd. a year after the real-estate unit shelved an initial offering.
Swire Pacific will distribute a 17 percent stake in its property unit to public shareholders of the listed company and controlling shareholder John Swire & Sons Ltd., according to a statement to the Hong Kong stock exchange yesterday.
Swire sold the Festival Walk shopping center to a unit of Singapore’s Temasek Holdings Pte for HK$18.8 billion ($2.4 billion), the biggest property transaction for the Hong Kong landlord. The proceeds give the real estate unit “sufficient capital for its current funding requirements,” Swire said.
“Swire’s property development in China needs a lot of money as well,” Wee Liat Lee, an analyst at Samsung Securities Co., said in a phone interview yesterday. “The separate listing may be for preparation further down the road if this property arm needs further funding.”
Swire Properties last year scrapped a planned IPO to raise as much as HK$20.8 billion because of “deteriorating market conditions,” the statement said.
Stock in Swire fell 3.7 percent to close at HK$91.55 in Hong Kong yesterday, before the announcement. It has dropped 28 percent this year, compared with the 22 percent decline in the benchmark Hang Seng Index.