Minsheng makes US$1.5b cash call
Deciding against a pitch to overseas investors, the lender plans to sell stock to its 10 top shareholders
China Minsheng Bank, the mainland's only privately controlled lender, plans to raise about US$1.5 billion by selling stock to its 10 largest shareholders, sources familiar with the transaction said.
Shareholders will meet on Tuesday to discuss the sale and are expected to approve the transaction.
Temasek Holdings, the Singapore government's investment arm, will be the only foreign investor to participate in the sale. The fund currently owns 4.55 per cent of the bank, Shanghai's third-largest lender.
Major domestic shareholders include New Hope Securities, with a 6.91 per cent stake, the Eastern Group with 5.44 per cent, and China Small and Medium Sized Enterprises Investments with a 5 per cent stake.
A further six shareholders, including a Shanghai biotechnology firm and a Xiamen-based trust company, own 6.5 per cent or less. Together, they control about 42 per cent of the Beijing-based, Shanghai-listed bank.
Minsheng has toyed with the idea of selling a stake to overseas investors but the complicated shareholder structure - which would make it difficult to get all parties to agree - makes it unclear if such a sale is really a realistic prospect.
Minsheng spurned Belgium-based Fortis Bank's interest in taking a strategic stake earlier this year, according to people familiar with the situation.
National Australia Bank, one of Australia's four largest banks, which faces shrinking margins, thanks to tough competition at home, has also approached Minsheng.
NAB, which operates retail and corporate banking as well as wealth management businesses, has branches in Hong Kong, New Zealand, Britain and the United States.
Societe Generale also considered making a bid for a strategic stake in Minsheng before joining instead with mainland partners in an offer to buy a controlling stake in Guangdong Development Bank.
Shareholder squabbling at Minsheng also threatens its long-delayed HK$6 billion initial public offering in Hong Kong.
Mainland banks usually try to line up strategic stakeholders in the run-up to an IPO in an effort to make themselves more attractive to international investors concerned about the loss-making and corruption-ridden Chinese banking system.
Minsheng is widely regarded as one of the country's healthier financial institutions, thanks in part to its focus on lending to foreign firms that are seen as less likely to have trouble paying off loans.
