Money

Shenzhen Development Bank gets nod for share placement

(Xinhua via COMTEX)
Updated: 2010-06-12 17:17

BEIJING - China's banking regulator had approved the Shenzhen Development Bank's direct share placement plan with Ping An Insurance, the Shenzhen Development Bank announced on Friday.

After the deal, Ping An, China's second largest insurer, will have a 30 percent stake in the Shenzhen Development Bank and replace Newbridge Capital, the Asia arm of TPG, as the bank's largest shareholder.

Earlier, on June 30, 2009, the SDB announced that it planned to place 370 million to 585 million shares with Ping An Insurance at 18.26 yuan ($2.67)/share to raise 10.683 billion yuan.

Previous media reports have said that the State Council had approved Ping An's plan to acquire a stake in the Shenzhen Development Bank, and that Ping An would de-list the bank and then incorporate it with its own banking subsidiary, the Ping An Bank.

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Richard Jackson, former president of the Ping An Bank, a banking arm of Ping An Insurance, had taken the position of the advisor to the board chairman of the SDB in May.

Analysts believe that the placement is Ping An's latest move to integrate the two banks.

Ping An has completed its purchase of a 16.76 percent stake in the SDB from Newbridge by issuing 299 million new Ping An H-shares directly to the latter. The transaction totaled $1.6 billion. Ping An's stake in the SDB has risen from less than 5 percent to 21 percent.

Ping An's 2009 annual report shows it generated 13.88 billion yuan of net profit, an eight-fold increase over the 1.42 billion yuan earned in 2008.

Shenzhen Development Bank share price closed at 17.15 yuan on June 11, lower than the private placement price.