Monday, March 10, 2008

Ping An, China's No.2 insurer, plans huge issue

Shareholders of Ping An Insurance (Group) Co, China's second-biggest insurer, were due to vote later on Wednesday on a planned $17 billion stock and bond issue that could be the world's sixth-largest ever fund-raising.

Following are key facts about Ping An and its offer.


* Ping An announced on Jan. 21 it would issue up to 1.2 billion additional local-currency A shares, or 16 percent of its current share capital, plus 41.2 billion yuan worth of convertible bonds with warrants.

* Ping An said it would price the new A-shares at no less than the stock's average market price over the 20 trading days before the offer prospectus is released, or no less than the average price on the previous days.

* At Tuesday's market close of 67.1 yuan, the whole offer could raise as much as 122 billion yuan ($17 billion), making it several times the size of China's biggest equity refinancing so far. Trading in Ping An shares was suspended on Wednesday as the company convened a shareholders' meeting.

* To move ahead with the offer, Ping An needs two-thirds approval from holders of domestic A shares, holders of its Hong Kong-listed shares, and all holders combined.


* Ping An posted an insurance premium income of 101 billion yuan in 2007, lagging bigger rival China Life's 197 billion yuan, but beating the 74 billion yuan at third-ranked China Pacific.

* Ping An has about 20 percent share of the domestic insurance market, which is dominated by China Life with nearly half the total. China Pacific has about 10 percent.

* Ping An has been listed on the Shanghai Stock Exchange since March 2007 and in Hong Kong since June 2004. China Life is listed in Shanghai, Hong Kong and New York, while China Pacific is listed only in Shanghai but has applied for a Hong Kong listing.

* Ping An's shareholding structure of its total 7.345 billion outstanding shares is as follows:


HSBC Insurance Holdings Ltd. * 8.43

Hong Kong and Shanghai Banking Corp. * 8.34

Shenzhen Investment Holdings Co. 7.40

Shenzhen New Horse Investment Development ** 5.30

Yuan Trust Investment Co. 5.17

Shenzhen Jingao Industrial Development ** 4.51

Shenzhen Jiangnan Investment Development ** 1.89

Other shareholders *** 43.30

Public A-share holders 15.66

Total 100.00


* The two units of HSBC Holdings Plc owned a combined 16.77 percent of Ping An, by far the biggest single shareholder, accounting for 48 percent of Ping An's Hong Kong-listed H shares, but holding no A-shares.

** Ping An has absolute control of these three companies, owned by senior officials and staff. The three account for about 12 percent of the whole company and 17 percent of Shanghai-listed A shares.

*** Most of the about 50 companies in this category are long-term institutional investors, which built their positions long before Ping An's A share listing. About half of them are based in the booming southern Chinese city of Shenzhen, where Ping An has its headquarters and where it is one of the biggest companies.

Sources: Company statements and China Insurance Regulatory Commission data.

($1=7.11 Yuan)

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