AcrossAsia Multimedia, the technology arm of Indonesia's Lippo Group, raised HK$590 million ($75.7 million) in its initial share offering on Hong Kong's Growth Enterprise Market (GEM). Investors followed the lead of such corporate stalwarts as Hong Kong conglomerate Hutchison Whampoa, Softbank of Japan and China Resources, which bought shares prior to the listing.
AcrossAsia, which established its headquarters in Hong Kong in June, placed 180 million shares with institutional investors at HK$3.28 each, the middle of the offer range of HK$3 to HK$3.40. The shares rose 19% to HK$3.90 in their first day of trading. The company aims to provide broadband internet, cable television and mobile phone services to companies throughout China and Southeast Asia.
The listing gives AcrossAsia a market capitalization of HK$19.7 billion, the biggest on GEM. The valuation is based largely on the company's subsidiary Multipolar, which provided 70% of AcrossAsia's revenue in 1999. Multipolar is an Indonesian information technology company, with more than 200 customers, mostly in the banking and financial services sector.
Investors also took their lead from Hutchison, which bought 73.2 million shares, or 1.5% of the company, for HK$3.29 a share in May, according to BNP Prime Peregrine, which managed the sale. Softbank bought 87 million shares, or 1.7% for HK$4.47 each in June and property-to-financial services conglomerate China Resources bought 236 million shares, or 4.6%, for HK$5.37 each shortly afterwards.
At the closing price of HK$3.90, Hutchison made a paper profit of HK$44.6 million, while Softbank made a paper loss of HK$49.6 million and China Resources made a paper loss of HK$346.9 million.
The Lippo Group, owned by the Indonesian Riady family, comprises businesses ranging from banking to real estate and retail. James Riady, the company's deputy chairman, was politically close to Indonesian officials under the Suharto regime and has good connections with the Wahid government. He is also close to US president Bill Clinton and is under investigation by the US Justice Department for alleged campaign finance violations.
Riady is expected to be charged with money laundering and conspiracy during the 1992 US presidential election, according to a report last week on Fox News. Prosecutors have agreed to indict Riady, assuming they gain approval from attorney-general Janet Reno. Lippo Group holds 78% of AcrossAsia.