Everbright may raise US$6b
Source: Bloomberg News |
June 15, 2011, Wednesday
|
Print Edition
Print Edition
CHINA Everbright Bank Co is seeking about US$6 billion in what could become Hong Kong's biggest share sale this year, as it joins bigger rivals in raising money to cope with stricter capital rules and expand lending.
Everbright Bank yesterday began to gauge investor demand for the offering of 10.5 billion shares, according to a term sheet.
The Beijing-based bank plans to set a final price on July 8 and start trading on July 15.
Chinese lenders in April were ordered to conduct stress tests on real estate loans, demand faster repayment on some borrowings and increase deposits set aside as reserves to the highest level in at least two decades.
Everbright Bank, listed in Shanghai, is seeking funds as the benchmark Hang Seng Index in Hong Kong fell 4.8 percent this month.
"We have yet to see any particularly strong selling points for Everbright Bank," said Li Kwok-suen, a fund manager at Phillip Capital Management (HK) Ltd. "Everbright Bank may have to work hard to line up cornerstone investors and accept relatively low valuation to make its stock attractive."
Initial public offerings in Hong Kong have raised US$11 billion this year, compared with US$5.9 billion in the same period in 2010, according to data compiled by Bloomberg News.
If successful, Everbright's offering would top Shanghai Pharmaceuticals Holding Co's share sale last month, which raised US$2.1 billion including the sale of over-allotment shares.
The offering by Everbright, China's ninth-largest bank by market cap, may also be bigger than Prada SpA's Hong Kong share sale, which could raise as much as US$2.6 billion later this week.
Everbright Bank said profit for the year ending on December 31 should be at least 16.9 billion yuan (US$2.6 billion), an increase of 32 percent on an annual basis, according to a pre-listing document posted on the Hong Kong exchange yesterday.
Proceeds of the stock sale will be used to "increase capital adequacy," the terms show.
Everbright Bank yesterday began to gauge investor demand for the offering of 10.5 billion shares, according to a term sheet.
The Beijing-based bank plans to set a final price on July 8 and start trading on July 15.
Chinese lenders in April were ordered to conduct stress tests on real estate loans, demand faster repayment on some borrowings and increase deposits set aside as reserves to the highest level in at least two decades.
Everbright Bank, listed in Shanghai, is seeking funds as the benchmark Hang Seng Index in Hong Kong fell 4.8 percent this month.
"We have yet to see any particularly strong selling points for Everbright Bank," said Li Kwok-suen, a fund manager at Phillip Capital Management (HK) Ltd. "Everbright Bank may have to work hard to line up cornerstone investors and accept relatively low valuation to make its stock attractive."
Initial public offerings in Hong Kong have raised US$11 billion this year, compared with US$5.9 billion in the same period in 2010, according to data compiled by Bloomberg News.
If successful, Everbright's offering would top Shanghai Pharmaceuticals Holding Co's share sale last month, which raised US$2.1 billion including the sale of over-allotment shares.
The offering by Everbright, China's ninth-largest bank by market cap, may also be bigger than Prada SpA's Hong Kong share sale, which could raise as much as US$2.6 billion later this week.
Everbright Bank said profit for the year ending on December 31 should be at least 16.9 billion yuan (US$2.6 billion), an increase of 32 percent on an annual basis, according to a pre-listing document posted on the Hong Kong exchange yesterday.
Proceeds of the stock sale will be used to "increase capital adequacy," the terms show.
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