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China Pacific revives plans for a listing in Hong Kong
Published on: 2009-07-20
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SHANGHAI -- China Pacific Insurance (Group) Co. has revived plans for a Hong Kong listing, which is expected to raise at least $3.5 billion and pave the way for Carlyle Group LP to offload some of its holding in the Chinese insurer.

China Pacific, 17.3%-owned by a Carlyle-led consortium, said it plans to sell as many as one billion shares, denominated in Hong Kong dollars, to replenish its capital base.

The insurer didn't say how much it aims to raise from the Hong Kong listing, but said it will price the new shares at no lower than the average weighted price of its Shanghai-listed yuan-denominated A shares in the 20 trading sessions before Friday.

According to analysts' calculations, China Pacific will sell the new H shares at no less than 23.78 yuan (US$3.48) each.

Class H shares are Hong Kong-listed shares issued by a company registered and based in China. Class A shares are yuan-denominated shares of Chinese companies listed on mainland exchanges.

China Pacific said the timing and terms of the share sale will depend on market conditions, and the deal is pending approval from shareholders and regulators in mainland China and Hong Kong.

Though the consortium's holding of China Pacific's A shares is subject to a lockup period, the consortium will be able to convert its entire stake into H shares when the insurer lists in Hong Kong, according to earlier information from the Chinese securities regulator. That will give the consortium the possibility of reducing its holding.

Based on China Pacific Insurance's current share price in Shanghai, Carlyle's stake is worth around $5.4 billion, more than 10 times its initial investment four years ago. China Pacific Insurance ended up 3.3% at 28.81 yuan.

The Chinese insurer shelved an IPO plan last year because of volatile market conditions.

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