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WHOLESALE BANKING | Tony Chua, China
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Bank of China mulls $8.8bln rights issue

Lender seeks 1.1-to-10 rights issue as analysts fear fund raising could put pressure on weak market.

Bank of China Ltd, China's No.4 lender, plans to raise up to 60 billion yuan ($8.8 billion) through a rights offer, the company said in a statement on Friday.

Bank of China (BOC), the country's biggest foreign currency bank, proposed for shareholders to get up to 1.1 rights per 10 shares held, it said in a statement.

"All the proceeds to be raised from the rights issue ...shall be applied towards strengthening the capital base of thebank and to improve the capital adequacy ratio of the bank," it said.

China Central Huijin Investment Ltd is the state-owned parent of BOC, but the statement did not mention whether Huijin would subscribe to the rights offer.

BOC's Hong Kong listed shares last traded at HK$3.97 on Wednesday and the bank's Shanghai shares traded at 3.4 yuan before trading was suspended on Friday.

The bank, which raised about $5.9 billion via convertible bonds in Shanghai last month, joined domestic rivals in a rush to replenish funds depleted by last year's lending spree and to meet tighter capital adequacy ratios demanded by regulators.

Agriculture Bank of China, China's third-largest lender, is raising $20 billion plus via a dual listing in Hong Kong and Shanghai.

View the full story in Reuters.

 

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