Private lender hopes to strengthen capital adequacy through placement ahead of possible listing in HK China Minsheng Banking Corp, the country's first privately owned lender, plans to place new shares worth 24 billion yuan in a move to strengthen its capital adequacy before a possible Hong Kong listing. The share sale, which was cut from the initial 3.5 billion new shares to two billion, or 16 per cent of the bank's enlarged share capital, will decide who will be Minsheng's biggest shareholder. At present, Minsheng's shareholder structure is fragmented, with Shenzhen-listed animal feed producer Sichuan New Hope Agribusiness holding the biggest stake of just 6 per cent. President Eddie Wang this month said no decision had been made on the bank's largest shareholder as it would depend on the distribution of the placement. However, existing shareholders are likely to take all the shares, which will be placed with up to 10 investors, since they have been given priority. Minsheng will start asking investors the price on the shares from tomorrow and take subscriptions until next Wednesday. The final price will be released on the following day. The stock rose 2.3 per cent to 12.19 yuan yesterday, valuing the share sale at 24.4 billion yuan. It has tripled since the placement plan was announced in July last year. Minsheng and other medium-sized mainland banks, which have been making more loans amid the country's fast economic growth, are seeking funds to meet the required capital adequacy ratio of at least 8 per cent. The loan growth helped fuel profits at local lenders including Minsheng, which said last year's earnings might rise 40 per cent to at least 3.78 billion yuan. The bank is also planning a listing in Hong Kong, although no timetable has been set. Sources said Minsheng had hoped to list its shares in Hong Kong last year but the plan was delayed partly due to internal reform. Minsheng yesterday said the priority of the placement would be given to shareholders who made compensations to minority shareholders during the state share reform last year. Those who agreed to a two-year lock-up period after the reform would also be considered as preferred buyers of the shares, the lender said. Other potential investors, including fund management companies, brokerages and insurers, might be allotted shares based on their subscription amount and proposed lock-up period. New Hope Investment and Temasek, which owns 4 per cent of Minsheng through its Asia Financial Holdings unit, compensated minority shareholders during the state share reform. Sichuan New Hope Agribusiness yesterday said it would 'actively join the private placement' through its New Hope Investment subsidiary. International Finance Corp, the World Bank's investment arm, invested US$45 million to buy a 20 per cent stake in New Hope Investment in 2004.