Banking

ICBC to raise $6.8b in HK, Shanghai rights issue

(Agencies)
Updated: 2010-11-11 13:10

SHANGHAI - Industrial and Commercial Bank of China (ICBC), the world's most valuable lender, said on Thursday it plans to raise 45 billion yuan ($6.78 billion) through a rights issue this month to replenish capital.

ICBC, which first unveiled the plan in July, is the last among China's "Big Four" state banks to raise funds to strengthen balance sheets.

China Construction Bank Ltd (CCB) and Bank of China, the country's second- and fourth-largest lenders, have detailed plans to raise a combined $18.2 billion through rights issues this month, while Agricultural Bank of China, the No 3 lender, raised $22.1 billion in a record IPO in July.

ICBC said in an exchange filing that it would sell 0.45 shares for every 10 existing shares, at steep discounts to its market prices.

Real estate sector shows signs of cooling Related readings:  ICBC eyes expansion in Greater Mekong Sub-Region  ICBC downplays purchase of US broker  China's ICBC eyes more acquisitions in SE Asia  ICBC starts expansion into insurance sector

The Beijing-based lender, which will start taking subscriptions from investors on Nov 16, priced the issue at 2.99 yuan per share in Shanghai, 37 percent lower than its last closing price of 4.74 yuan.

Its Hong Kong shares will be sold at HK$3.49 apiece, at a 47 percent discount to its market price of HK$6.63.

ICBC's state parent, Central Huijin, a unit of China's sovereign wealth fund, has said it would fully participate in the rights issue.

Smaller lender Nanjing Bank also said on Thursday that it plans to raise up to 5 billion yuan via a rights issue in Shanghai.

Except for the "Big Four" banks, Chinese lenders including Bank of Communications and China Merchants Bank have raised a combined $10.5 billion so far this year through rights issues, according to Thomson Reuters data, to replenish capital depleted by last year's record lending.

Bank of China said on Thursday its $9 billion rights issue was 99.57 percent subscribed.