Excessive charges and boastful rights misplaced: ant bankers hit by shock IPO suspension


© Reuters. FILE PHOTO: China International Capital Corporation Ltd company logo displayed at a press conference on the company's annual results in Hong Kong

Posted by Scott Murdoch

HONG KONG (Reuters) – The eleventh stop on Ant Group's record $ 37 billion listing hurt not only the company but also leading bank China International Capital Corporation (CICC), which is likely to have a hefty payday and a jump in the world is losing investment banking rankings.

CICC (HK 🙂 had the coveted position of being the only bank operating on both legs of the Hong Kong and Shanghai listing, which would have made it possible to earn more fees than other banks as part of the business.

In the league tables released Monday by Dealogic, which distributed loans for the Ant deal, CICC shot to second place worldwide to get new entries from fifth, and placed behind Credit Suisse (S 🙂 and in front of the Wall Street majors.

This would have been CICC's highest position in the global tables since it topped the rankings in 2009, according to Dealogic data.

CICC, whose shares fell 6.5% on Wednesday, did not immediately respond to a request for comment.

The Shanghai Stock Exchange decided Tuesday to suspend the deal just days before its debut after regulators intervened, prompting Ant to suspend the Hong Kong portion of the listing as well.

Stock capital bankers who had a good year with a record third quarter expected Ant 2020 to close on a bang. However, with the listing on hold, Ant's army of investment bankers, including Wall Street firms, is forced to waive fees and show off the rights to have participated in the world's largest public offering.

"If the deal is delayed indefinitely, the leading banks will likely only get part of their legal costs back. It all depends on what was agreed at the beginning," said capital markets advisor and former investment banker Philippe Espinasse.

The 24-person banking consortium that signed the part of the deal in Hong Kong would pay up to $ 198 million, according to the company's prospectus.

"There is no revenue to be paid," said a Hong Kong banker who was not involved in the IPO. "You do it for the pleasure of working for the king," he said of Ant founder and billionaire Jack Ma.

The banker was not authorized to speak to the media and declined to be identified.

The missed opportunity is a double blow for CICC and the other major insurers as they have been deterred from working on assignments for Ant competitors during the process.

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Steven Gregory