FWD Group, the Hong Kong-based insurer backed by tycoon Richard Li Tzar-kai, filed a draft prospectus to list its shares on the city’s exchange, as it pressed on with switching its initial public offering from New York to its hometown bourse.

FWD, which ranked within the top three insurers in Thailand and the Philippines, has now taken a step closer to a Hong Kong share sale.

It usually takes at least six months for a new issuer to obtain all the approvals and clearance from Hong Kong’s exchange before an IPO kicks off.

FWD had aimed to raise as much as US$3 billion in New York last September, which would have valued the group at US$13 billion, people familiar said in August. Bloomberg reported earlier Monday that the deal size could now be trimmed to US$1 billion.

Morgan Stanley, Goldman Sachs, CMBI and JP Morgan are helping the company with the planned shares offering.

The city’s IPO market is going through a dry spell in the first two months of this year, where issuers either have had to postpone deals, or settle for lower valuations as uncertainties stemming from the war in Ukraine, a surge of Omicron cases in Hong Kong and China’s new rules for offshore listings have curbed investors’ appetite for new shares.

Just seven IPOs were completed in January and February, raising about US$1.2 billion, an 87 per cent plunge from US$9.7 billion raised from 22 deals a year ago, according to data from Refinitiv and the Hong Kong stock exchange.

Richard Li Tzar Kai, son of the Chinese tycoon Li Ka-shing, attends the graduation ceremony of Shantou University on June 27, 2017 in Shantou, China.

IPO activities may only recover during the third quarter this year, some market participants said, boding well for the launch of mega size deals as investors’ appetite returns.

FWD’s switch to Hong Kong followed the regulatory roadblock it met in the US last October when US regulators asked about potential risks associated with the Chinese government extending its authority over Hong Kong-based firms. While FWD operates across 10 markets in Asia, its presence in China is limited to a representative office.

In a separate filing to the Hong Kong stock exchange on Monday, FWD also disclosed that it has recently added two pre-IPO investors. In January, it raised about US$200 million from Huatai Growth Focus, which is owned by brokerage Huatai Securities, and private equity firm ORIX Asia Capital.

This came after FWD last December raised US$1.4 billion from a group of investors including Apollo Global Management, the Canada Pension Plan Investment Board (CPPIB), the reinsurer Swiss-Re, the Siam Commercial Bank, the Li Ka Shing Foundation and Metro Pacific Investments Corp.

It would use the proceeds raised from these private placements to reduce leverage, including a US$1.25 billion of debt repaid in 2021 and a further US$250 million repaid in January.

Founded in 2013, FWD is the insurance arm of Pacific Century Group, Li’s sprawling investment group. The company offers life and medical insurance, general insurance and employee benefits.

The underlying value of FWD’s new business increased to US$446 million last year, growing at an average annual rate of 18.8 per cent from US$316 million in 2019. Southeast Asia contributed more than 50 per cent of the value of its new business last year, according to its prospectus.

Total revenue increased to US$11.7 billion last year from US$6.23 billion in 2019. Net profit amounted to US$188 million last year, against a net loss of US$268 million in 2020 and a loss of US$365 million in 2019.

It plans to use the yet-to-be specified stock-sale proceeds to shore up its capital in anticipation of any potential regulatory requirements, support business growth and fund the business of 29.9 per cent-owned PT Asuransi BRI Life in Indonesia, the prospectus said.