Regulator authorizes Agricultural Bank of China’s IPO

Move ends speculations on deferment of $30bln IPO due to lukewarm interest and concerns.

China's securities regulator on Wednesday approved Agricultural Bank of China Ltd.'s application for its planned $20 billion-$30 billion initial public offering in Hong Kong and Shanghai, removing the last hurdle for what could be the world's largest-ever share float.

The decision by the China Securities Regulatory Commission also ended a brief bout of speculation over a possible delay in the IPO given signs of lukewarm interest and concerns over AgBank's likely high valuation and less attractive business fundamentals compared with its local peers.

AgBank, the last of China's Big Four state-run banks to float shares on the stock market, said in a preliminary prospectus Friday it will sell up to 54.8 billion new shares, or 17% of its enlarged capital base, in Shanghai and Hong Kong, if over-allotment options are exercised in the two cities.

China's third-biggest lender by assets said it will allocate 53% of the offering, or 29.2 billion shares, in Hong Kong and 47% of the offering, or 25.6 billion shares, in Shanghai.

The Hong Kong stock exchange will review the Hong Kong part of the bank's dual listing Thursday, people familiar with the deal said earlier. If the deal is approved, the bank plans to list in Shanghai July 15 and the following day in Hong Kong, they added.

AgBank, more than 96%-owned by China's sovereign-wealth fund and the Ministry of Finance, has been trying to change its business model following years of government-directed lending to farmers and agriculture-related businesses, often in poor areas.

View the full story in the Wall Street Journal.