Monday, June 22, 2009

China Minsheng Banking Corp. Wins Investor Approval For Hong Kong Share Sale

. Monday, June 22, 2009

By stockOzone team

China Minsheng Banking Corp., the nation’s first privately owned lender, won investor approval to revive an initial share sale in Hong Kong after shelving the plan for four years.

Minsheng Chairman Dong Wenbiao got the go-ahead for the sale at a shareholder meeting today in Beijing, where the bank is based. Minsheng plans to offer stock equivalent to as much as 15 percent of its enlarged share capital, and may boost the sale by 15 percent if there’s enough demand.

The bank may raise as much as $3 billion, according to people familiar with the matter, making it the biggest public stock offering in Hong Kong since April 2008. The proceeds would help Shanghai-traded Minsheng plug a capital shortfall that threatens to stunt profit growth just as signs emerge that China’s stimulus package is reviving the world’s third-largest economy.

Minsheng would become the seventh Chinese bank to list in Hong Kong.

UBS AG, Switzerland’s biggest bank by assets, will help manage the stock sale, people familiar with the matter said last week. Minsheng aims to complete the offering by the end of the year barring any “unusual circumstances,” Liu Minwen, director of the capital financing office, told shareholders today.

The Chinese bank’s capital adequacy ratio narrowed to 9.22 percent at the end of December, below the 10 percent minimum required by the country’s regulator and the 13.4 percent average of the nation’s 14 publicly traded banks. Minsheng needs as much as 20 billion yuan ($2.9 billion) to boost its core capital ratio to above 9 percent, Liu said.

The ninth-largest bank traded on the mainland delayed its proposed Hong Kong sale for a second time in June 2005, citing market conditions. The plan was first delayed in February 2004 after Minsheng said it faked a document showing a shareholder meeting had approved a change in the company’s name.

Minsheng, founded by 59 private investors including pig- feed tycoon Liu Yonghao, aims to increase profit by 35 percent this year after growth slowed to 25 percent in 2008, the slowest pace since its initial public offering in 2000.

Disclosure: Author does not own any of the stocks discussed here.

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