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Chongqing bank targets US$300m IPO

(chinaview.cn)
Updated: 2007-02-08 17:12

Chongqing City Commercial Bank plans to raise as much as US$300 million from a Hong Kong initial public offering (IPO) in 2008, sources said.

Lehman Brothers had been given the mandate to restructure the bank and arrange the offering while major players were expected to join the deal, a source said.

Carlyle Group, the biggest buyout firm in the United States, and Dah Sing Financial Group in December agreed to pay 1.01 billion yuan (US$130 million) for a combined 25 percent stake in Chongqing City.

China's 113 city commercial banks, which typically operate 40 to 60 branches, are thought to be easier to manage and more likely to be free of credit troubles than their larger counterparts.

Larger city commercial lenders Bank of Beijing and Bank of Shanghai, which plan to raise as much as US$1 billion each from share sales, were the first such lenders to be allowed by mainland regulators to open branches outside their home city.

Chongqing City, which is based in China's largest city of 34 million inhabitants, is still restricted to its home base. "They're focused on developing the huge local market there as opposed to looking elsewhere," a source said.

Meanwhile, Intime Department Store, the largest retailer in Zhejiang province, planned to begin investor education later this week for its US$250 million float in Hong Kong, market sources said.

Sole bookrunner Morgan Stanley will arrange the roadshow to either Europe or the US during the week of the Lunar New Year, when many investors in Asia will be on holiday. The shares are expected to be priced in the week of March 5.

Intime operates four department stores in Zhejiang and controls five more in Hubei Province through subsidiaries. US buyout firm Warburg Pincus paid US$90 million for an undisclosed stake in Intime last year.

"Department store operators command a higher margin than supermarkets because they rent out shelf space and take a cut of the sale so I personally like them better," Phillip Securities director Louis Wong Wai-kit said.

Shares of Golden Eagle Retail Group have doubled since their listing in March last year. They closed 0.96 percent higher at HK$6.30 (81 US cents) yesterday.