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Minsheng sells brokerage stake for profit

CHINA Minsheng Bank Corp has sold its entire stake in Haitong Securities Co for about 5.46 billion yuan (US$799 million) to take profit from the five-year investment.

"The company had sold 381 million shares in Haitong Securities Co as of June 22 at an average of 14.33 yuan apiece," the Beijing-based lender said in a stock exchange filing yesterday.

The bank sold 93 million shares in Haitong in the first quarter, 130 million shares in April and the remaining 157 million shares this month.

"The sale of stakes in Haitong Securities Co in the secondary market is expected to be an important booster for the bank's revenue," said Yuan Ling, an analyst at BOC International.

The sale realized a profit of 3.8 billion yuan from its five-year investment in Haitong. The bank's President Hong Qi said in an earlier report that Minsheng's profit is set to rise 35 percent this year from last year's 7.89 billion yuan.

Minsheng last year tried to sell its holdings in Haitong in auctions but the attempts failed because few investors were willing to buy shares in brokerages when the stock market slumped.

The lender has won investor approval to revive an initial share sale in Hong Kong after shelving the plan for four years. Minsheng, which has 18.82 billion shares, plans to sell up to 15 percent of its enlarged share capital in Hong Kong.

The bank said it could issue 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 Bank of China International Ltd, China International Capital Corp, Macquarie Group and UBS AG will handle the 20-billion-yuan H-share offering, Bloomberg News quoted sources as saying yesterday.


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