Report: China bank sets Hong Kong IPO

HONG KONG - Industrial & Commercial Bank of China, the country's largest lender by assets, set a price range of 2.56 Hong Kong dollars (33 cents) to 3.07 Hong Kong dollars (39 cents) a share for its initial public offering in Hong Kong, a person familiar with the situation told Dow Jones Newswires Sunday.
ICBC is planning the first ever dual listing in Shanghai and Hong Kong. If priced at the top of the range, ICBC's dually listed IPO would exceed $21 billion, with the Hong Kong-listed portion alone topping $16 billion, Dow Jones Newswires said, citing an unnamed source.
That would make it the world's largest, ahead of NTT Mobile Communications Network Inc., or NTT DoCoMo Inc., which raised $18.4 billion in 1998, according to market-data provider Dealogic Inc. PLC.
The bank is seeking to issue 13 billion A shares priced in the Chinese yuan in Shanghai and 35.39 billion H shares, stocks for a mainland Chinese-registered company listed in Hong Kong, which amounts to about 14.8 percent of its share capital.
If the green shoe of ICBC's IPO is exercised, the bank could sell up to 14.95 billion A shares and 40.7 billion H shares, which would account for 16.7 percent of its total share capital. A green shoe, or overallotment option, allows underwriters to buy up to an extra 15 percent of shares at the offering price from the issuer for a period of several weeks after an offering.
The H shares were priced between 1.96 and 2.23 times forecast 2006 book value pre-green shoe, said the person familiar with the issue.
Of its listed peers in China's Big Four state-owned banks, China Construction Bank Corp.'s IPO was priced at 1.95 times book value ahead of its October 2005 listing, while Bank of China Ltd. was priced at 2.11 times book value ahead of its June listing in Hong Kong and subsequent A share listing in Shanghai. The ICBC IPO has secured $3.5 billion in offers already, from Hong Kong tycoons, including billionaire Li Ka-shing, and two Middle Eastern investment agencies.
Chinese banks have been rushing to raise funds to strengthen their balance sheets ahead of the full opening of the domestic banking sector to foreign institutions at the end of this year.

- China Daily,  Daily Mail news exchange item