Over 90% of Ping An shareholders give nod to big share offering

Ping An Insurance<601318><2318>, China’s second largest insurer by premium, held its long-awaited shareholders meeting on Mar. 5 and revealed that over 90% of its shareholders voted in favor of its financing plan, according to sources.

During the special meeting, the plan of new share sale received the approval of 92% shareholders, while nearly 93.20% of its shareholders agreed on the proposed issue of convertible bonds. However, there were still a considerable number of individual shareholders voted against the capital raising plan.

Based on the plan, the insurer may raise RMB 12 billion through the issue of no more than RMB 80 billion new shares and RMB 41.2 billion worth of convertible bonds.

Analysts speculate that Ping An might use a large amount of the proceeds to fund its overseas acquisitions, and it will definitely make sense if it is meant to happen, as the Chinese government has now been encouraging domestic financial institutions to move out of the home market into the international market place.

However, an aggregate of analysts indicated that Shanghai’s stock market is expected to see a huge selling pressure as an outcome of the crucial meeting.

The last closing price of Ping An's A-shares was RMB 67.10, down 4.29% or RMB 3.01 from the previous trading day.