UPDATE 1-Li Ka-shing utility prices HK IPO at bottom, raising $3.1 bln
* HK Electric Investments to offer 7.24 pct yield
* Jan. 29 debut in region's biggest IPO since late 2012
* Power Assets to use proceeds for overseas expansion
HONG KONG, Jan 22 (Reuters) - HK Electric Investments Ltd , the investment trust controlled by tycoon Li Ka-shing's Power Assets Holdings Ltd, raised $3.1 billion in a Hong Kong initial public offering priced at the very bottom of an ambitious target range.
Though well below the size Asia's richest man once hoped for, the deal means the trust carries a higher yield than other listed Hong Kong utilities. With a low price designed to foster a solid debut on Jan. 29, it will still be the biggest IPO in Asia excluding Japan since the $3.6 billion listing by People's Insurance Group of China Co Ltd (PICC) in November 2012.
The trust priced the IPO at HK$5.45 per unit, compared with a marketing range of HK$5.45 to HK$6.30 each, Power Assets said in a regulatory filing on Wednesday. Power Assets will use the funds raised, about HK$24.1 billion ($3.1 billion), for overseas expansion.
The HK Electric IPO is the first in what's expected to be a marquee year for Hong Kong bankers, as major economies pick up steam and companies to raise funds to tap into growth opportunities. Advisory firm PwC estimates Hong Kong IPOs could raise $32.2 billion in 2014, the highest since 2010 and nearly double the 2013 tally of $17.1 billion.
At $3.1 billion the amount is a long way short of the $5.7 billion targeted at one stage. But the IPO's value was already slashed in December by nearly a third from the original maximum target as investors sounded out for the sale balked at what they felt was an overly ambitious valuation.
At the IPO price, the trust is forecast to pay 2014 dividend distribution yield of 7.24 percent, said a source with direct knowledge of the IPO, who was not authorized to speak publicly on the matter. Hong Kong's listed utilities currently trade with annual yields between 2 percent and 4 percent.
The deal will also be the biggest trust IPO in Asia ex-Japan since Li listed Hutchison Port Holdings Trust for $5.5 billion in March 2011.
Goldman Sachs and HSBC acted as sponsors and joint global coordinators of the IPO, with 10 other banks including Citigroup, Credit Agricole and Morgan Stanley also hired as co-lead managers.