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New Hope to raise Minsheng stake holding

(South China Morning Post)
Updated: 2007-03-07 15:54

Sichuan New Hope Investment, in which the World Bank's investment arm has a 20 percent stake, plans to raise its stake in China Minsheng Banking Corp to more than 10 percent to remain as its biggest shareholder.

New Hope had subscribed to 400 million Minsheng shares, or 20 percent of the new shares the bank planned to sell, chairman Liu Yonghao said.

"We will stay as the largest shareholder after buying those shares," Mr Liu said.

New Hope helped establish Minsheng 11 years ago. The company had a 6 percent stake in September last year.

Asia Financial Holdings, a subsidiary of Singapore's Temasek Holdings with a 4 percent stake, did not subscribe to Minsheng's shares, Mr Liu said.

The bank has yet to announce the final placement result.

The lender is raising more than 18 billion yuan (US$2.32 billion) from selling 2 billion new A shares, or 16 percent of the enlarged share capital, to shareholders and other institutional investors.

New Hope is a unit of Shenzhen-listed Sichuan New Hope Agribusiness, one of the country's biggest animal feed producers.

"We've made a huge gain from our initial investment in Minsheng," Mr Liu said.

Minsheng and other mid-sized lenders have been expanding quickly over the past year and they need to raise funds to maintain the minimum capital adequacy level.

The bank, which said its profit might rise 40 percent to at least 3.78 billion yuan last year, is eyeing a listing in Hong Kong, although no timetable had been set yet.

New Hope is also looking to set up commercial lenders in rural areas after the central government shows its support for rural financial organisations.

Last month, the China Banking Regulatory Commission said it would ease regulations on investments in rural lenders to encourage banks to increase their presence there.