Bank of China to raise 60 bln yuan in rights issue to replenish capital
31. Oct, 2010
Xinhua reports, “Bank of China (BOC), the country’s fourth-largest lender by assets, said Friday it would raise up to 60 billion yuan (8.97 billion U.S. dollars) in a dual rights issue in Shanghai and Hong Kong stock exchanges to replenish capital.
In a statement filed to the Shanghai and Hong Kong stock exchanges, BOC said it will sell one share for every 10 existing shares and start taking subscriptions from existing investors on Nov. 3.
The new shares are priced at 2.36 yuan per share for A-share investors on Shanghai Stock Exchange or 2.74 HK dollars for H-share investors in Hong Kong, it said.
According to the lender’s equity structure, BOC will raise about 42 billion yuan (6.28 billion U.S. dollars) from A-share shareholders and 18 billion yuan (2.69 billion U.S. dollars) from H-share investors.”
Read more: Xinhua
According to the Wall Street Journal, “Central Huijin Investment Ltd., the domestic-investment arm of China’s sovereign-wealth fund, will sell its first batch of bonds as soon as this month and aims to issue up to 187.5 billion yuan ($27.7 billion) of bonds by 2011 to help maintain its stakes in large state-controlled banks, a person familiar with the situation said Tuesday. The debt issue comes as Central Huijin faces increasing financing pressure in its efforts to maintain its controlling stakes in major domestic banks, which have been gearing up for share offerings and convertible-bond sales in recent months to boost their capital after a sharp increase in lending last year—the key platform of China’s stimulus measures—eroded their capital.”
