Shenzhen Development Bank, a mainland lender controlled by buyout firm Newbridge Capital, launched its second attempt at making all its equity tradable yesterday, increasing the compensation offered to independent shareholders in order to gain their approval to complete the regulatory requirement needed before further fund raising can be made.
The lender, in which Newbridge has an 18 per cent stake, said it would offer 140.9 million shares, or one for every 10 shares held, to holders of the 72 per cent of shares that are already tradable , .
It will also give them 208 million call warrants, or one share per 10. Half of the warrants, convertible into shares for 19.89 yuan, could be cashed in six months, and the remaining half in nine months.
The stock, which has risen in value by 92 per cent since the beginning of the year, last changed hands at 27.85 yuan before being suspended from trading on May 11 pending the share reform announcement. They will resume trading on May 25.
The bank is one of the largest firms that failed to complete its share reform before the end of the 2006 deadline set by the China Securities Regulatory Commission.
It had ordered that companies with non-tradable shares convert them, clearing up a legacy of the non-market economy.. The mostly state-owned holders of the shares have to compensate the other shareholders to gain their approval for the modification.