BoCom trims rights issue by more than 20%
By Zhang Fengming |
June 8, 2010, Tuesday
|
Print Edition
Print Edition
THE Bank of Communications has cut its rights issue by more than a fifth on weak market sentiment as well as plans by other rivals to raise capital this year.
China's fifth-biggest bank aimed to raise 33.1 billion yuan (US$4.85 billion) from the rights issue in Shanghai and Hong Kong, after trimming the offer from an original maximum of 42 billion yuan in February, it said in stock exchange filings yesterday.
The original figure was a top-line estimate and the bank "must consider market conditions, the bank's need to expand and shareholders' interest" when it planed the issue, said Qian Wenhui, an executive vice president of the bank, yesterday in Shanghai.
BoCom will sell 3.89 billion yuan-denominated A shares in Shanghai at 4.50 yuan each and 3.46 billion Hong Kong dollar-denominated shares in Hong Kong at HK$5.14 each, according to its filings.
Subscription to the bank's rights offer is open from Thursday and will close on June 21.
HSBC, which holds 19 percent of BoCom, said it will subscribe for its full entitlement, or 1.4 billion H-shares.
Shanghai-based BoCom needs fresh capital after it extended a sizzling 511 billion yuan of new loans in 2009, more than double the amount it lent in 2008.
Last year's loan growth cut BoCom's capital adequacy ratio by 1.47 percentage points to 12 percent at the end of 2009 from a year earlier, just above the regulatory minimum of 11 percent for state-owned banks. Its core CAR, comprising equity capital, fell to 8.15 percent from 9.54 percent a year earlier.
BoCom follows rivals to replenish capital this year. Last week, Agricultural Bank of China Ltd unveiled its dual-listing in Shanghai and Hong Kong, which could be the world's biggest initial public offering, to raise US$30 billion.
The Industrial and Commercial Bank of China, the Bank of China and China Construction Bank are also seeking funds.
China's fifth-biggest bank aimed to raise 33.1 billion yuan (US$4.85 billion) from the rights issue in Shanghai and Hong Kong, after trimming the offer from an original maximum of 42 billion yuan in February, it said in stock exchange filings yesterday.
The original figure was a top-line estimate and the bank "must consider market conditions, the bank's need to expand and shareholders' interest" when it planed the issue, said Qian Wenhui, an executive vice president of the bank, yesterday in Shanghai.
BoCom will sell 3.89 billion yuan-denominated A shares in Shanghai at 4.50 yuan each and 3.46 billion Hong Kong dollar-denominated shares in Hong Kong at HK$5.14 each, according to its filings.
Subscription to the bank's rights offer is open from Thursday and will close on June 21.
HSBC, which holds 19 percent of BoCom, said it will subscribe for its full entitlement, or 1.4 billion H-shares.
Shanghai-based BoCom needs fresh capital after it extended a sizzling 511 billion yuan of new loans in 2009, more than double the amount it lent in 2008.
Last year's loan growth cut BoCom's capital adequacy ratio by 1.47 percentage points to 12 percent at the end of 2009 from a year earlier, just above the regulatory minimum of 11 percent for state-owned banks. Its core CAR, comprising equity capital, fell to 8.15 percent from 9.54 percent a year earlier.
BoCom follows rivals to replenish capital this year. Last week, Agricultural Bank of China Ltd unveiled its dual-listing in Shanghai and Hong Kong, which could be the world's biggest initial public offering, to raise US$30 billion.
The Industrial and Commercial Bank of China, the Bank of China and China Construction Bank are also seeking funds.
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