People's Insurance Company (Group) of China (PICC), one of China's largest insurers, has set the price range for its proposed Hong Kong IPO of up to US $3.62bn. According to four sources, the company is offering 6.9bn primary shares, or 16.7% of the enlarged capital, at an indicative price range of Rmb2.78-Rmb3.28, aiming to raise Rmb19.18bn-Rmb22.6bn (US $3.07bn-$3.62bn).
The Hong Kong dollar price range will be HK$3.43-$4.03 per share, based on the current currency exchange rate. The price range represents a pre-money valuation of Rmb96bn-Rmb113.2bn, much below the talk on the insurer's initial target of not lower than Rmb130bn.
The deal will start taking orders from institutional investors on November 22. Pricing is slated for November 30. IFR earlier reported the insurer is in advanced negotiations over cornerstone investments from China's largest life insurer, China Life Insurance, US insurer American International Group, French re-insurer Scor and a few more insurance companies in Asia. The company is also discussing cornerstone investments with State Grid Corporation of China, the country's largest power grid operator, and a number of other big SOEs. Proceeds from the IPO will be used to strengthen PICC's capital base.
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