(Yicai Global) March 13 -- One of China’s biggest banks, Agricultural Bank of China Ltd., plans to issue up to 27.5 billion shares through private offerings to raise CNY100 billion (USD16 billion) and replenish capital to satisfy regulatory requirements.
Two major shareholders, state-owned Central Huijin Investment Ltd. and the Ministry of Finance, are the main investors for the fundraising, AgBank said in a statement. Huijin will contribute CNY40 billion and the finance ministry will chip in CNY39 billion.
China requires commercial banks maintain their core tier-one capital ratio, tier-one capital adequacy ratio and capital adequacy ratio under 5, 6 and 8 percent. The requirements are even stricter for AgBank, a systematically important lender with assets worth CNY1.3 trillion (USD206 billion), but its ratios were 10.6, 11.2 and 13.4 percent as of the end of September, according to its own data.
The issuance price will be at 90 percent of the average trading price for the 20 trading days prior to the issuing date. Other investors in the round include China National Tobacco Corp. and its subsidiary Hubei Tobacco Co., Shanghai Haiyan Investment Management Co., Zhongwei Capital, and New China Life Insurance Co.
AgBank’s mainland-listed shares stood at CNY4.14 (USD0.65) as of 11.17 a.m. local time.