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Sat, Sep 15, 2007 - Page 10 News List

China Construction Bank's IPO set to be largest in China


China Construction Bank Corp (中國建設銀行), the nation's biggest property lender, has set a price range for an initial public offering (IPO) in Shanghai that could net up to 58 billion yuan (US$7.7 billion), making the sale China's biggest IPO yet.

The price range for the initial offering is 6.15 yuan to 6.45 yuan per share, the bank said in notices carried yesterday in the state-run Shanghai Securities News and other financial newspapers.

If priced at the high end of the range, the IPO will be the largest so far for a domestic bourse, beating the US$5.9 billion the Industrial & Commercial Bank of China (中國工商銀行) raised in the Shanghai segment of a dual offering with Hong Kong that raised a world record total of US$21.9 billion last October.

Subscriptions for the 9 billion yuan-denominated shares began yesterday. Final pricing will be announced on Wednesday and the shares will start trading on the Shanghai Stock Exchange on Sept. 25.

Bank of America Corp holds an 8.5 percent stake in the Construction Bank. The US lender's stake in the bank will be diluted to 8.19 percent following the Shanghai share offering, the Construction Bank said in its prospectus.

The state-owned bank's 9 billion new shares will account for 3.85 percent of its share capital. Of the total, 35 percent will go to institutional investors and up to 65 percent to retail investors.

Proceeds from the IPO will be used to build up the bank's cash base and upgrade services and management, the lender has said.

Meanwhile, China's securities regulator will meet on Monday to review a proposed IPO in Shanghai by China Shenhua Energy Co (神華能源), the world's second-biggest coal miner.

Shenhua's Hong Kong traded shares rose 5 percent to HK$40.5 (US$9.5) early yesterday on the news of the long-expected IPO, announced late on Thursday.

The company plans to issue up to 1.8 billion yuan-denominated shares on the Shanghai Stock Exchange. It did not say how much it expects to raise in the share offering.

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