BEIJING: China Life Insurance Co said it will subscribe for 13 billion yuan ($2 billion) in Postal Savings Bank of China shares as the country's biggest unlisted lender moves closer to an initial public offer.
China Life, the country's biggest insurer by market value, will buy 3.342 billion subscription shares, according to the agreement. After the transaction, China Life will hold no more than 5 percent of the enlarged issued share capital of Postal Savings Bank.
The transaction will be completed in cash, China Life said in a Hong Kong stock exchange filing.
The two firms also agreed to work together on areas such as corporate governance, cash management, personal finance, small and medium enterprise finance services.
State-owned Postal Savings Bank of China (PSBC) is expected to announce more domestic and foreign investors in the coming days, as the country's sixth biggest bank prepares for a planned IPO in Hong Kong in 2016.
The lender is expected to sell a 15 percent stake, mainly to foreign investors, people with knowledge of the matter told IFR.
IFR reported that investors included UBS AG, JPMorgan, Singapore's Temasek Holdings and the International Finance Corp (IFC), a unit of the World Bank.
PSBC, which has has 40,000 branches throughout the country, is a key banking partner of China Life, the insurer said, and the transaction will support development of its insurance principal business.
"Postal Saving Bank is introducing domestic and foreign strategic investors by way of capital injection," China Life said in its statement.
Source:-The Economic Times
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