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HK listing plan lifts Minsheng share price

SHARES of China Minsheng Banking Corp yesterday rose to its highest in more than a year in Shanghai after it filed an application indicating it seeks a listing in Hong Kong to raise capital.

The bank yesterday jumped 5.78 percent to 7.69 yuan (US$1.13) in Shanghai while the Shanghai Composite Index inched up 0.52 percent to 2,768.34. The bank hit an intraday high of 7.82 yuan.

The Beijing-based bank said in a filing to the Shanghai Stock Exchange over the weekend that it plans to sell up to 15 percent of its enlarged share capital in Hong Kong. The bank has 18.82 billion shares at present. It will be the seventh mainland lender to be listed in Hong Kong.

The bank said it could issue an additional 15 percent more shares if a "green shoe" option is exercised. A green shoe gives underwriters the right to sell additional shares if demand for the stock exceeds the original amount offered.

"The H-share listing could help the bank to expand its reputation in overseas markets and cement a sound base for its overseas mergers and acquisitions in the future," said Tang Yawen, an analyst at Northeast Securities.

Tang estimated the H-share issue price at between HK$7.5 (96 US cents) and HK$8.2.

The bank said it will use the proceeds to boost its capital adequacy ratio of 9.22 percent. Although it is higher than the 8 percent regulatory minimum it is less than the 10 percent needed for Chinese banks in M&A lending.

The bank said it will complete the share sale within 18 months after getting shareholders' approval. They are to vote on the deal on June 22.


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