Stock Market

PICC revives dual IPO plan for HK, Shanghai bourses

PUBLISHED : Friday, 18 May, 2012, 12:00am
UPDATED : Friday, 18 May, 2012, 12:00am

People's Insurance Company of China (PICC), one of the mainland's largest insurers, has revived its plan for a dual listing in Hong Kong and Shanghai.

It aims to raise US$5 billion to strengthen its ability to settle claims.

After failing in its attempt at a Hong Kong-Shanghai initial public offering last year, PICC expects to complete the long-awaited fundraising this year, according to two people with knowledge of the deal.

The size of the IPO has yet to be finalised, but the people said PICC would still be aiming for US$5 billion, the sum it expected to raise last year.

PICC chairman Wu Yan said in March that the insurer was speeding up preparations for a dual listing.

The firm plans to attract investors from Europe, America and Asia as strategic investors for the fundraising, Wu said.

The company would not comment on the IPO yesterday.

It has been three years since PICC began its preparations for an IPO. The Beijing-based insurer, partly owned by the national pension fund, did a 'pre-roadshow' in July last year to test demand.

In December, New China Life Insurance completed a US$1.9 billion dual Hong Kong-Shanghai IPO.

Mainland insurers are eager to raise fresh funds to boost the solvency margin ratio - a measure of an insurer's ability to settle claims.

The A-share portion of PICC's IPO, expected to net more than 10 billion yuan (HK$12.26 billion), would be one of the largest new share offerings on the mainland this year, representing another setback to China Securities Regulatory Commission (CSRC) chairman Guo Shuqing's efforts to curb the influx of equity, which could weigh on the market.

A-share IPOs are subject to the CSRC's approval, but the fund-raising plans of major state-owned companies are usually endorsed by the State Council, so the regulator might have to give it the green light.

Earlier this month, state-owned China Postal Express & Logistics got the go-ahead from the CSRC's IPO review committee for a 9.97 billion yuan flotation on the Shanghai Stock Exchange.

10b yuan

Amount of money PICC seeks to raise from the A-share portion of its proposed IPO