Postal Savings Bank of China seeking $8.2 billion in Hong Kong IPO: IFR

HONG KONG (Reuters) – State-owned Postal Savings Bank of China (PSBC) plans to raise up to $8.2 billion in a Hong Kong initial public offering and will start taking orders from investors next week after it set a price range for the deal, IFR reported on Friday.

PSBC plans to sell 12.2 billion shares at an indicative range of HK$4.68 to HK$5.18 each, putting the total deal at up to HK$63.2 billion ($8.15 billion), added IFR, a Thomson Reuters publication, citing people close to the deal.

A man walks out of a Postal Savings Bank of China branch in Beijing April 23, 2015. REUTERS/Kim Kyung-Hoon/File Photo

A man walks out of a Postal Savings Bank of China branch in Beijing April 23, 2015. REUTERS/Kim Kyung-Hoon/File Photo

The company will start taking orders from investors for the IPO on Sept. 13, with pricing slated for Sept. 20, IFR said.

PSBC declined to comment on the IPO terms.

The lender, China’s largest by number of bank branches, lined up five cornerstone investors that will buy nearly 75% of the shares on offer, IFR reported. The investors include China State Shipbuilding, which agreed to buy $2.5 billion worth of shares, Shanghai International Port Group and HNA Group, with $2 billion and $1 billion in investments respectively.

The indicative range represents a 2016 price-to-book ratio of 0.94 to 1.02 times, one of the people told IFR. By comparison, large-size peers trade in Hong Kong at an average of 0.71 times, according to Thomson Reuters Eikon data.

Overseas fund managers remain skittish over valuations for PSBC, despite the bank’s low levels of non-performing loans compared to publicly-traded rivals. PSBC met in late July with several marquee international investors keen to learn more about the bank, its finances and plans for growth, but some were still concerned over unattractive valuations for the lender.

($1 = 7.7571 Hong Kong dollars)

(Reporting by Fiona Lau of IFR; Writing by Elzio Barreto; Editing by Stephen Coates and Simon Cameron-Moore)



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