China Insurance seeks HK$626m from placement as stock rallies
China Insurance International Holdings, a Hong Kong-listed insurer that controls the mainland's Tai Ping Life Insurance, plans to raise as much as HK$626 million through a share placement to take advantage of the stock's rally, sources close to the deal said.
The firm is marketing 75 million shares, of which 85 per cent are new shares while the rest came from controlling shareholder China Insurance (Holdings), according to a term sheet sent to fund managers.
The shares are being marketed at HK$8.10 to HK$8.35 each, representing a 3.7 to 6.6 per cent discount to yesterday's closing price of HK$8.67. The stock has surged 162.7 per cent this year.
Cazenove is the placing agent of the offering.
'The deal came to the market at the right time since most mainland insurance and financial stocks soared to fresh highs recently,' a fund manager involved in the offering said.
China Insurance reported net profit of HK$328 million for the first half this year, reversing a HK$44 million loss a year ago. Turnover jumped to HK$7.1 billion from HK$3.7 billion.
The rally in the company's share price probably was fuelled by the proposed listing of Ming An Insurance, a Hong Kong-based non-life insurer in which China Insurance owns a 4.9 per cent stake, a banking analyst said.
Bankers close to the deal said Ming An is expected to be listed on the local bourse before Christmas instead of early next year.
Ming An plans to raise between US$120 million and US$130 million in an initial public offering in Hong Kong in order to fund expansion plans in the mainland insurance market, sources close to the deal said.
Bookbuilding for the deal is expected to begin tomorrow and close on December 14 when the price of the shares is to be announced. Trading of the shares is expected to begin on December 21 or 22.
Well timed
China Insurance's stock has surged 162.7pc this year
The deal came as most mainland financial stocks soared
Stock rally probably was fuelled by Ming An's proposed listing
