ICBC may seek US$6.6b
Source: Agencies |
July 8, 2010, Thursday
|
Print Edition
Print Edition
THE Industrial and Commercial Bank of China, the world's most valuable lender, may tap investors for up to US$6.6 billion, sources said, joining the Agricultural Bank of China, which priced its initial public offering to be the world's largest, in a rush to raise funds.
ICBC plans to raise funds through rights offers to shareholders of its Hong Kong-listed H-shares, as well as its Shanghai-listed A-shares, sources with direct knowledge of the deal said yesterday.
That's a change from ICBC's earlier plan, which, according to sources, had a few months ago mandated banks to arrange a US$7 billion to US$10 billion Hong Kong stock offering.
One source said the rights offers still needed approval from the ICBC board, its shareholders and the regulator, so the timing of the offering could be by the end of 2010.
Officials at ICBC were not immediately available for comment.
Big state-owned Chinese banks, including the Bank of China, are seeking to replenish funds depleted by last year's record lending spree and to meet higher capital levels demanded by regulators.
The massive fundraisings have weighed on China's stock markets, contributing to their being among the worst performers in the world this year.
But with AgBank's IPO pricing providing no nasty surprises and the government set to stump up the bulk of the new funds by subscribing to the other banks' planned rights issues, the stock market may be relieved and the remaining banks' fundraising plans may be smooth, analysts said.
"The government was pushing for banks to lend to keep GDP growing in 2009, so it seems fair to me that it now has to recapitalize the banks with all this fundraising," said Ivan Li, an analyst at Kim Eng Securities in Hong Kong. "In the medium term, the government may choose to allow the market to play a bigger picture."
ICBC plans to raise funds through rights offers to shareholders of its Hong Kong-listed H-shares, as well as its Shanghai-listed A-shares, sources with direct knowledge of the deal said yesterday.
That's a change from ICBC's earlier plan, which, according to sources, had a few months ago mandated banks to arrange a US$7 billion to US$10 billion Hong Kong stock offering.
One source said the rights offers still needed approval from the ICBC board, its shareholders and the regulator, so the timing of the offering could be by the end of 2010.
Officials at ICBC were not immediately available for comment.
Big state-owned Chinese banks, including the Bank of China, are seeking to replenish funds depleted by last year's record lending spree and to meet higher capital levels demanded by regulators.
The massive fundraisings have weighed on China's stock markets, contributing to their being among the worst performers in the world this year.
But with AgBank's IPO pricing providing no nasty surprises and the government set to stump up the bulk of the new funds by subscribing to the other banks' planned rights issues, the stock market may be relieved and the remaining banks' fundraising plans may be smooth, analysts said.
"The government was pushing for banks to lend to keep GDP growing in 2009, so it seems fair to me that it now has to recapitalize the banks with all this fundraising," said Ivan Li, an analyst at Kim Eng Securities in Hong Kong. "In the medium term, the government may choose to allow the market to play a bigger picture."
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