China Minsheng Banking Corp plans to raise up to 15 billion yuan (US$2.08 billion) in a bonds sale.
The company will sell 10-year bonds attached with call warrants to buy shares, it said in a statement to the Shanghai Stock Exchange yesterday. Shareholders will vote on the plan on February 18.
The sale is open to institutional and retail investors with a bond book value of 100 yuan each. Bond holders can take call warrants, half of which are one year, the other half two years.
More details such as the exact scale of bonds and warrants and the interest will be decided later.
"The bank can seek more merger and acquisition opportunities with the capital rising," said She Minhua, a China Securities Co banking analyst.
He kept the add rating on the bank, which is one of the top picks along with Shanghai Pudong Development Bank, Industrial Bank and China Construction Bank.
It's a good time to build positions in the banking sector, which is undervalued, he said.
Chinese banks have raised US$23 billion in share sales last year.
The banks are shoring up wealth-management capacity besides the traditional lending business.
The Beijing-based bank also plans to set up a credit-card unit for 1.6 billion yuan in Beijing, it said yesterday.
Credit cards will be the most important consumer credit product after mortgages, with profits expected to be US$1.6 billion by 2013, accounting for 22 percent of total consumer credit profits, New York-based McKinsey & Co said earlier.
Minsheng, founded in 1996 by 59 investors, including pig-feed tycoon Liu Yonghao, has averaged 40 percent annual profit growth since 2002.
(Shanghai Daily January 31, 2008)
