PICC builds listing base on 17 cornerstone investors
Biggest mainland non-life insurer lines up 17 cornerstone investors in initial public offering to raise up to HK$27.8 billion
People's Insurance Co (Group) of China (PICC) has taken out some insurance on its planned initial public offering of shares in Hong Kong.
The state-owned insurer has lined up an unusually large number of so-called cornerstone investors - at least 17 so far - to ensure the success of its offering, which could raise HK$27.8 billion and be the biggest Hong Kong listing in two years.
The Beijing-based company, the country's biggest non-life insurer, plans to sell 6.9 billion new shares, which is equivalent to 16.67 per cent of the enlarged capital. The new shares are expected to be priced within an indicative range of HK$3.42 to HK$4.03 a share. The firm's price-to-embedded value ratio, a common measure for insurance companies, is set at between 1.2 times and 1.6 times in the current fiscal year ending March, compared with an industry average of 1.4 times, according to three people with direct knowledge of the transaction.
The new listing will be the biggest in Hong Kong since AIA, the Asian life insurance unit of US insurance giant American International Group (AIG), raised US$20.5 billion in 2010.
According to the people, the cornerstone investors are expected to subscribe to about US$1.85 billion of shares, or more than half the total offer.
Among the 17 cornerstone investors lined up are AIG, China Life Insurance, French reinsurer SCOR and Russian Insurance, a Moscow-based state-owned company. Other investors include such big Chinese state-owned enterprises as State Grid, China's largest power distributor, and Sinomach, China's largest heavy machinery maker.
