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AgriBank to Raise Up to $11.4 Billion in Hong Kong Stock Sale
25.06.2010 10:58 "Agro Perspectiva" (Kyiv) —
Agricultural Bank of China Ltd. the country’s largest lender by customers, plans to raise as much as HK$88.4 billion ($11.4 billion) in the Hong Kong portion of its initial public offering.
Agricultural Bank will offer 25.4 billion shares in Hong Kong at HK$2.88 to HK$3.48 apiece, the Beijing-based company said today in a filing to Japan’s Ministry of Finance. The lender will also sell 22.2 billion shares in Shanghai at a price that hasn’t been disclosed.
Chairman Xiang Junbo is wooing investors after the Shanghai Composite Index slid 22 percent this year and Fitch Ratings warned that record lending in 2009 may saddle the country’s banks with bad debts. Agricultural Bank is offering the shares at an average discount of 17 percent to its three biggest rivals on a price-to-book basis, according to estimates by the IPO underwriters and data compiled by Bloomberg.
«Certainly it will be worth looking at,» said Julian Mayo, who helps oversee $3 billion as investment director at Charlemagne Capital in London. «It reflects an air of common sense in the pricing. It’s a sign that demand is less than had been the case if this deal came out six months ago.»
The company, commonly known as ABC, needs to raise more than $22 billion to surpass Beijing-based Industrial & Commercial Bank of China Ltd.’s deal in 2006 as the world’s biggest IPO ever.
Assuming Agricultural Bank’s Shanghai sale is priced at the same level as the Hong Kong shares and the bank exercises an option to expand the deal by 15 percent, the total offering would amount to as much as $24.5 billion, data compiled by Bloomberg show.
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