Economy

Bank of China to raise 60B yuan through rights issue

(Xinhua)
Updated: 2010-07-02 22:38

HONG KONG: Bank of China, one of the country 's "big four" State-owned banks listed in both Hong Kong and Shanghai, announced late Friday it expected to raise no more than 60 billion yuan (8.86 billion U.S. dollars) through share rights issuance.

In a statement filed to the Hong Kong stock exchange, Bank of China said it was seeking the approval of its shareholders for the rights issue "in order to strengthen the capital base of the Bank and to improve the capital adequacy ratio of the Bank".

On the assumption of up to 1.1 rights shares for every 10 existing shares, no more than 27.922 billion rights shares in total -- comprising no more than 19.56 billion A rights shares and no more than 8.362 billion H rights shares -- will be issued, said the statement.

A rights shares refer to Bank of China shares listed in the Shanghai stock exchange, while H rights shares refer to those listed in Hong Kong.

"The gross proceeds to be raised from the rights issue will be no more than 60 billion yuan. The final amount of gross proceeds shall be determined by the actual subscription price and number of the rights shares to be issued at the time of the rights issue," said the statement.

The Beijing-based bank said the A rights shares would be sold by selling agents on behalf of the bank, and H rights shares would be fully underwritten.

The subscription price will not be lower than the bank's most recent net asset value per share, which stood at 2.03 yuan (30 U.S. cents) on December 31 of 2009, said the bank.

On Friday, closing price of Bank of China in Shanghai was 3.39 yuan (50 U.S. cents) while its closing price in Hong Kong was 3.97 HK dollars (51 U.S. cents).