MINSHENG ON ITS OWN IPO PLUS 9 PERCENT STAKE IN UCBH
Minsheng plans $4.7bn IPO
By Jamil Anderlini in Beijing
Published: November 8 2009 22:43 | Last updated: November 8 2009 22:43
China Minsheng Bank will aim to raise up to $4.68bn through Hong Kong’s largest initial public offering this year in a move that should solidify China’s dominant position in the global IPO market.
The country’s first privately owned lender will on Monday embark on a long-delayed roadshow in preparation for what will also be the world’s fourth-largest IPO of 2009, if the shares are priced at the top end of a range of HK$8.50-HK$9.50.
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If successful, Minsheng’s listing will give China five of the top 10 global IPOs this year.
The bank plans to sell 3.32bn shares, or 15 per cent of its enlarged share capital, to raise as much as $4.1bn and could sell an additional 498m shares to take the total up to $4.68bn under a “greenshoe” option if the offering is heavily oversubscribed, which is often the case in Hong Kong.
Unlike almost every other Chinese lender, Minsheng was established with investment from private entrepreneurs and virtually no state funding in 1996, but it is still in effect controlled by the government through Communist party appointments of top executives.
The bank was listed on the Shanghai stock exchange in 2000 and has suspended previous plans to list in Hong Kong on at least two occasions.
People involved in the sale said there was huge interest from institutional investors wanting to buy into the cornerstone tranche of the issue but the final price of the shares will be set in 10 days, depending on the result of the roadshow. Shares are expected to start trading in Hong Kong on November 26.
IPOs in Hong Kong are open to global investors and allow Chinese companies to raise foreign exchange, while Shanghai listings are open only to domestic investors who cannot freely convert their funds out of renminbi.
Minsheng’s plans to expand beyond China’s borders were dealt a blow on Friday when United Commercial Bank, a large San Francisco lender with branches in Hong Kong and Shanghai, became the 120th US bank to fail this year.
Minsheng owns 9.9 per cent of UCBH Holdings, United Commercial’s parent company, and by the end of September had been forced to write down 93 per cent of the $126m it has invested over the past two years.
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