CHINA Minsheng Banking Corp plans to raise nearly 15 billion yuan (US$2.08 billion) in a bond sale.
The company will sell 10-year bonds attached with call warrants to buy shares, it said in a statement to the Shanghai Stock Exchange yesterday. Shareholders will vote on the plan on February 18.
Each bond has a book value of 100 yuan each. Bond holders can get certain amount of call warrants, half of which are 12-month warrants and the other half are 24-month ones. The exact scale of bonds and warrants and the interest will be decided later.
``The bank can seek more merger and acquisition opportunities,'' said She Minhua, a China Securities Co banking analyst. "So raising capital is necessary."
He maintained his add rating on the bank's shares and said it is one of the top-picks among Shanghai Pudong Development Bank, Industrial and Commercial Bank of China and China Construction Bank. It's a good time to build positions in the banking sector, which is undervalued, She said.
Chinese banks raised US$23 billion in share sales last year.
Beijing-based Minsheng also plans to set up a credit card unit for 1.6 billion yuan in Beijing, it said today.
Credit cards will be the most important consumer credit product after mortgages, with profit rising to US$1.6 billion by 2013 or 22 percent of total credit profits, New York-based McKinsey & Co said earlier.
Minsheng, founded in 1996 by 59 investors, including pig-feed tycoon Liu Yonghao, has averaged profit growth of 40 percent annually since 2002.