China Agbank to apply for $30bn IPO
Hong Kong, May 3, 2010
Agricultural Bank of China, one of the country's Big Four lenders, plans to file applications this week for its dual listing in Shanghai and Hong Kong.
The planned IPO, the world's biggest ever, could raise as much as $30 billion, according to the sources briefed on the bank's plan.
The sources also told Reuters on Monday that the bank would seek cornerstone investors this week for an IPO in July or even earlier.
Investment banks including Deutsche Bank and JPMorgan have invited their top clients including some US hedge funds and China-focused private equity funds to meet top management of Agbank to discuss possible IPO investments.
"After China Construction Bank announced its rights issue plan, Agbank definitely felt more hurried to push its IPO plan forward," said one of the sources.
"We all know the market window could be closed anytime within the next few months so whoever can sell their IPO first wins," he added.
The sources declined to be identified as they were not authorised to speak to the media.
Cornerstone investors are institutional investors who agree to subscribe part of an IPO ahead of its public listing, with a committment to a certain lock-up period, usually six months.
A successful line-up of influential cornerstone investors can boost confidence among smaller investors and share performance.
Beijing-headquartered Agbank could not be immediately reached for comment on Monday when most companies in mainland China are closed for business for a public holiday.
China Construction Bank (CCB) announced last week its up to $11 billion rights issue plan. Industrial and Commercial Bank of China (ICBC), will begin to seek mandates for its up to $12 billion capital-raising plan this week, sources have said.
CCB and ICBC, the world's largest bank by market value, are another two of the Big Four state lenders in China.
Agbank was the most financially shaky of the Big Four until it was bailed out by the government to clean up its books for public listing. It will be also the last of the Big Four to go public.
Beijing is keen to help Agbank finish its restructuring and IPO so it can better support the country's agriculture-related sectors.
"After the IPO of Agbank, the Chinese government may implement more monetary policies in the second half of this year," said a European banker, adding Agbank would get a green light for its IPO applications, thanks to strong support from Beijing. – Reuters