Money

ICBC to raise up to $6.6b in rights issue

(Agencies)
Updated: 2010-07-29 09:19

HONG KONG - Industrial & Commercial Bank of China, the world's most valuable bank, plans to raise up to 45 billion yuan ($6.64 billion) through a rights offer, the latest in a series of massive fundraising plans by Chinese lenders to shore up their capital base.

The bank proposed a 0.6-for-10 rights issue to existing shareholders, ICBC said in a statement to the Shanghai stock exchange late on Wednesday.

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ICBC said the rights offer was "to ensure the healthy development of our business and to boost our bank's competitiveness, as well as its resilience to risks and its sustainability in profits."

ICBC also said it plans to privatize its unit ICBC (Asia), but did not provide further details.

ICBC's fundraising announcement confirms a Reuters report in early July that the bank may tap investors for up to $6.6 billion, joining Agricultural Bank of China, which just launched its IPO.

Big State-owned Chinese banks including Bank of China are seeking to replenish funds depleted by last year's record lending spree and to meet higher capital requirements demanded by regulators.