China Life Insurance Co the country's top life insurer, is planning a Shanghai stock listing worth up to US $2.67 billion as Beijing encourages leading firms to sell shares at home. China Life said on Tuesday it would issue up to 1.5 billion A-shares, and a source close to the insurer said the deal should be completed by the end of the year.
At China Life's current Hong Kong-traded stock price of HK$13.88, an offering of that size would be worth roughly US $2.67 billion, around 5 percent of the insurer's existing stock market value, although the company said the price would be determined by market conditions.
"We would like to have our clients as our investors," Chairman Yang Chao told investors. China Life and its parent firm have been buying small stakes in mainland lenders, and Yang said the company would be on the lookout for domestic bank acquisitions once regulations permit. Yang also said the company is looking for overseas strategic investors in China Life.
The company will hold a shareholder meeting in Beijing on October 16 to vote on the sale plan, and the source said its approval "should be no problem", allowing the insurer to then apply to the China Securities Regulatory Commission. "We now expect China Life can eventually list in Shanghai by the end of December or even earlier," the source said.
The news comes after Air China Ltd this month slashed the size of its initial public offer in Shanghai by nearly 40 percent because of poor demand and staged the worst performing listing in the city this year.