SHANGHAI - China Construction Bank said today it was launching an initial public offer of shares that is expected to be China's biggest, raising more than US$7 billion ($10.2 billion).
The country's second biggest bank said it was starting consultations with institutional investors on pricing the offer inShanghai of up to 9 billion new A shares, or 3.85 per cent of its expanded share capital.
Sources close to the deal have said Construction Bank planned to price the A shares at 5.80 to 6.20 yuan apiece, which could raise 52.2 billion ($10 billion) to 55.8 billion yuan.
That price range would mean a discount of between 6 and 13 per cent to the last close of the bank's Hong Kong-listed H shares at $HK6.86 ($1.28). One source told Reuters last week that the bank now hoped to price the A shares above the originally planned range.
China Construction Bank said it would issue as many as 3.15 billion A shares to institutional investors and the remainder to retail investors, but that the ratio might shift in favour of the retail tranche if demand were strong.
Institutional subscriptions to the offer will be taken on Friday and Monday, and retail subscriptions on Monday, the bank said. Funds frozen by the subscriptions will start returning to the banking system on September 19.
The offer by China Construction Bank, 8.5 per cent owned by Bank of America, is expected to eclipse China's previous record domestic IPO by Industrial & Commercial Bank of China, which raised 46.64 billion yuan last October in the Shanghai part of an IPO that included Hong Kong.
