Mon, Oct 09, 2006 - Page 12 News List

ICBC initial public offering might be the world's largest


Industrial & Commercial Bank of China Ltd (ICBC, 中國工商銀行), China's largest lender by assets, set a price range of HK$2.56 (US$0.33) to HK$3.07 a share for its initial public offering in Hong Kong, according to Dow Jones Newswires yesterday.

ICBC is planning the first ever dual listing in Shanghai and Hong Kong. If priced at the top of the range, ICBC's dually listed IPO would exceed US$21 billion, with the Hong Kong-listed portion alone topping US$16 billion.

That would make it the world's largest, ahead of NTT Mobile Communications Network Inc which raised US$18.4 billion in 1998, according to market-data provider Dealogic Inc PLC.

The bank is seeking to issue 13 billion A shares priced in the Chinese yuan in Shanghai and 35.39 billion H shares, stocks for a mainland Chinese-registered company listed in Hong Kong, which translates into about 14.8 percent of its share capital.

If the green shoe of ICBC's IPO is exercised, the bank could sell up to 14.95 billion A shares and 40.70 billion H shares, which would account for 16.7 percent of its total share capital.

The H shares were priced between 1.96 to 2.23 times forecast 2006 book value pre-green shoe, said a person familiar with the issue.

Of its listed peers in China's Big Four state-owned banks, China Construction Bank Corp's (中國建設銀行) IPO was priced at 1.95 times book value ahead of its listing last October, while Bank of China Ltd (中國銀行) was priced at 2.11 times book value ahead of its June listing in Hong Kong and subsequent A share listing in Shanghai.

The ICBC IPO has secured US$3.5 billion in offers already, from Hong Kong tycoons, including billionaire Li Ka-shing (李嘉誠), and two Middle Eastern investment agencies.

ICBC said it would use the proceeds from its listing to supplement capital and support business growth. At the end of June, its capital adequacy ratio was 10.74 percent and its non-performing loan ratio was 4.1 percent.

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