GIC’s logistics unit seeks to raise $2.95 billion in IPO

Daniel Stanton and Saeed Azhar


Singapore sovereign wealth fund GIC’s logistics unit is seeking to raise as much as S$3.9 billion ($2.95 billion) in an initial public offering, making it the city-state’s second-biggest IPO ever.

Global Logistic Properties, which owns industrial and logistic properties in China and Japan, will be the first listing of a firm majority-owned by the Government of Singapore Investment Corp, the world’s fourth-biggest sovereign fund

GLP’s listing will be among several large listings expected in Asia in the next few weeks with American International Group looking to raise about $15 billion in the share offering of its Asian life insurance unit.

GLP set an indicative price range of S$1.78 to S$1.96 a share and will sell 1.996 billion shares, or 44 percent of the total share capital, including stake sales to cornerstone investors.

The size also includes an over-allotment option, according to the IPO prospectus issued on Monday and a term sheet.

Trading in the shares, to be listed on the Singapore mainboard, will begin on Oct 18.

The indicative price works out to about 1.03 times to 1.09 times price-to-book, according to a term sheet seen by Reuters, below 1.3 times to 1.4 times projected by issue managers.

GLP will have a market capitalization of as much as S$8.83 billion.

IFR Asia first reported the indicative price.

Cornerstone investors include Alibaba Group, Bosera Asset Management, CB Richard Ellis, ING Clarion Real Estate Securities and Lion Global Investors.

China and Japan

GIC’s unit said in its prospectus that it was one of the largest modern logistics firms in China and Japan. It owns, manages and leases out 296 completed properties within 122 integrated industrial parks with a gross floor area of 6.2 million square meters.

GLP’s customers include Wal-Mart China, DHL and FedEx.

The unit is led by Jeffrey Schwartz. the former chairman and CEO ProLogis. GIC’s real estate unit had bought assets in China and Japan from ProLogis in 2009.

GLP plans to use $1.1 billon proceeds from the IPO to strengthen its business in China and Japan.

“We believe that the current supply of logistics facilities in China is insufficient, in terms of both quantity and quality, to address the expected growth in demand,” GLP said.

“We expect that Japan’s position as China’s largest trading partner in Asia will generate cross-border marketing opportunities and other ‘network effects’ for us.

GLP plans to use $600 million to pay down existing shareholder loans and $700 million to redeem preferred equity.

The company incurred a proforma loss before tax the in fiscal year ended March 31 of $108.7 million compared to a proforma loss before tax the previous fiscal year of $287.3 million.

Citigroup, JPMorgan are joint global coordinators and bookrunners with UBS, DBS and CICC. ($1=1.321 Singapore Dollar)

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