BoCom plans world’s biggest share sale
(20 March 2012 – China) Shanghai-based Bank of Communications (BoCom) intends to offer the world’s largest share sale since last May, selling US$8.9 billion (A$8.4 billion) private placement.
The intended sale comes after a US$2.7 billion lending spree over the past two years depleted its finances.
China’s Ministry of Finance and HSBC Holdings Plc, BoCom’s two largest shareholders, will take part in the placement, according to a filing at the Hong Kong Stock Exchange.
One analyst believes the share sale will make BoCom one of the most-capitalized among China’s leading banks and could boost its core capital adequacy ratio by about two percentage points. BoCom is China’s fifth largest lender.
HSBC will pay about US$1.7 billion for 2.36 billion Hong Kong-listed shares to keep its stake at the existing 19.03 percent.
China’s Ministry of Finance will increase its stake to 26.5 percent from 26.5 percent following its purchase of shares listed in both Shanghai and Hong Kong.
The China Banking Regulatory Commission last August said it will require the country’s largest lenders to have a minimum capital adequacy ratio of 11.5 percent by the end of 2013.
BoCom’s capital adequacy ratio fell to 11.9 percent in September, from 12.4 percent at the beginning of 201.
Its core capital adequacy ratio dropped to 9.2 percent, lower than the 9.5 percent mandatory minimum under the new capital plan.
China’s Ministry of Finance and HSBC Holdings Plc, BoCom’s two largest shareholders, will take part in the placement, according to a filing at the Hong Kong Stock Exchange.
One analyst believes the share sale will make BoCom one of the most-capitalized among China’s leading banks and could boost its core capital adequacy ratio by about two percentage points. BoCom is China’s fifth largest lender.
HSBC will pay about US$1.7 billion for 2.36 billion Hong Kong-listed shares to keep its stake at the existing 19.03 percent.
China’s Ministry of Finance will increase its stake to 26.5 percent from 26.5 percent following its purchase of shares listed in both Shanghai and Hong Kong.
The China Banking Regulatory Commission last August said it will require the country’s largest lenders to have a minimum capital adequacy ratio of 11.5 percent by the end of 2013.
BoCom’s capital adequacy ratio fell to 11.9 percent in September, from 12.4 percent at the beginning of 201.
Its core capital adequacy ratio dropped to 9.2 percent, lower than the 9.5 percent mandatory minimum under the new capital plan.
Subscribe