An initial public offering for Hui Xian Real Estate Investment Trust will begin on Monday and raise up to 11.16 billion yuan ($1.7 billion), the trust’s managers said.
Hui Xian’s sole asset is Oriental Plaza, a complex in Beijing controlled by billionaire Li Ka-shing, Hong Kong’s richest man. Two billion units in the trust, or about 40 percent, will be sold to investors. The issue price will be 5.24 yuan to 5.58 yuan, giving the trust a market capitalization of 26.2 billion to 27.9 billion yuan.
The remaining 60 percent of the trust will be owned by a group of companies, including Cheung Kong (Holdings) Ltd.
and Hutchison Whampoa Ltd., both controlled by Li, and Bank of China Ltd.
Oriental Plaza consists of a shopping mall, office and apartment towers and the Grand Hyatt Beijing hotel.
The long-awaited IPO is the latest step in the growing use of China’s tightly controlled currency abroad and investors will be keenly watching the results.
Beijing is promoting Hong Kong as a platform for yuan-based international banking.
Hong Kong is a former British colony that was handed back to China in 1997, but maintains its own political and financial systems and currency.
Hong Kong banks started handling yuan in 2004 and now offer services ranging from deposits to credit cards to trade financing that allows foreign companies to pay Chinese business partners in yuan.
Beijing began allowing foreign companies to issue yuan debt last year.
The World Bank, the Asian Development Bank, Caterpillar Inc. and McDonald’s Corp. have sold yuan-denominated debt to finance activities in China.
Hong Kong’s stock exchange topped the list last year for initial public offerings, with companies raising $57 billion in share sales, outpacing its rivals in London and New York.
