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Bank revises share-reform plan
Updated: 2006-06-12 11:06
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Shenzhen Development Bank Co. said Friday it revised its share-reform plan, changing the price level that would trigger a cash compensation for its tradable-share holders.
The bank earlier said it would give its A-share holders a maximum of 0.48 yuan in cash for every 10 shares if the average closing price of its A shares is below 5.25 yuan or above 10.75 yuan (US$1.34) in the last 60 trading sessions of the 12-month period following the share reform. It would give the cash equivalent to the price difference below and above those targets.
Those price targets have been changed to 7.25 yuan and 8.75 yuan, Shenzhen Development Bank said in a statement, giving tradable-share holders a better chance of getting some cash compensation.
The revision follows complaints from several shareholders that the compensation offered wasn't sufficient.
For the past year, regulators have required all listed companies to make their shares fully tradable, to end a practice where an average of two-thirds of the capital of listed companies are held in nontradable form, and often under government ownership.
Most companies have offered a mix of cash, free shares, warrants and share price guarantees to minority shareholders, which are paid for by the major shareholders converting their nontradable shares into tradable ones.
The payments are meant to address concerns of small investors that more stock will flood the market and dilute the value of their investment.
Shenzhen Development Bank's shareholders are scheduled to vote on the plan July 17.