(Yicai Global) March 13 -- Agricultural Bank of China, one of the country's four largest commercial banks, aims to raise CNY100 billion (USD15.81 billion) through the biggest private placement ever seen on A-share markets, as part of efforts to replenish its capital.
The Beijing-based bank will issue up to 27.47 billion of yuan-denominated A-shares to a target group which includes existing shareholders Central Huijin Investment Co. and the Chinese government’s finance ministry, who will subscribe to CNY40.03 billion and CNY39.21 billion, respectively, it said in a statement.
The move to replenish capital may be in response to record levels of lending in the first two months of this year. Chinese banks lent a record CNY2.9 trillion and CNY839.3 billion in January and February, respectively, government data shows.
The subscriber group is also made up of China National Tobacco Corp., Shanghai Haiyan Investment & Management Co., Zhongwei Capital Holdings Co., CNTC Hubei Provincial Tobacco Corp., and New China Life Insurance Company Ltd. All of the parties will use cash for their subscriptions.
The exact date of the placement has yet to be determined. Its issue price will either be 90 percent of ABC’s average trading price in the 20 days preceding the pricing benchmark date or the net asset value of each share attributable to ABC’s ordinary shareholders, according to the bank’s ABC’s latest auditing period, whichever value is higher.
The trading moratorium period for the shares for Central Huijin and the finance ministry will be five years starting from the date of the placement. For the other subscribers, the period will be 36 months.
ABC’s non-performing loan ratio was 1.81 percent as of the end of last year, down by 0.56 percentage point annually though still higher than the industry’s average level (1.74 percent). Its provision coverage rate is 208.37 percent, up 34.97 percentage points from the end of last year.