AgBank’s IPO to get $22bn
AGRICULTURAL Bank of China priced its Hong Kong and Shanghai dual listing yesterday, a deal that would break all IPO records by raising more than $22bn when adding in over-allotment shares.
The initial public offering (IPO), which is raising funds to replenish capital, still faces a tough aftermarket, with a debut planned for 15 July in Shanghai, and a day later in Hong Kong. It has fought through a plunging Chinese stock market and a Euro zone debt crisis that has shaken other markets across the globe.
Despite the headwinds, China’s third largest bank by assets was able to pull in strong demand for the IPO. AgBank, the last of China’s big banking institutions to go public, has a sprawling network of branches in China’s rural parts but also a presence in its major cities as well.
Only three years ago, AgBank was technically insolvent, with non-performing loans of around 24 per cent. Its turnaround comes after a $30bn bailout and bad loan carve-out.
AgBank will sell 22.24bn yuan (£2.17bn)-denominated A-shares at 2.68 yuan apiece, after indicating a 2.52-2.68 yuan range. That means AgBank will raise a total of $19.3bn, but a greenshoe over-allotment would expand proceeds to $22.2bn.