China's Pudong Bank to raise $6 billion through equity, bond sale
27 Feb 2010
China's state owned Shanghai Pudong Development Bank said it was preparing to sell stakes to strategic investors, the FT.com reported on Friday.
Pudong Development plans to sell 20 per cent stake in the bank to China Mobile, the mainland's biggest wireless operator, for about Rmb40 billion ($5.9 billion), according to a report by Guotai Junan Securities, one of China's biggest brokerages.
The bank plans to raise as much as Rmb15 billion ($2.1 billion) by selling subordinated bonds in the Chinese interbank market and another Rmb15 billion with a private share placement.
The bank, in which Citigroup has a 3.8 per cent stake, is one of many state-controlled lenders seeking to shore up balance sheet after a year of unprecedented loan growth and introduction of stricter capital requirements by regulators.
Pudong Development said it would sell the new shares to no more than 10 institutional investors, major shareholders and other legal investors.
Citi's stake in Pudong Development would be diluted as a result of the fundraising, but the US bank was unlikely to buy new shares to shore up its holding, analysts said.
.webp)
