China Everbright Bank goes ahead with Hong Kong listing plan

After a one-day delay to consider market conditions, China Everbright Bank has decided to go ahead with its plan for a Hong Kong listing and yesterday kicked off pre-marketing for what could become the largest share sale in Hong Kong so far this year.

The Beijing-based lender, which listed in Shanghai in August last year, has earlier said that it intends to sell up to 10.5 billion new H-shares in Hong Kong, with the potential to add another 1.5 billion shares through an overallotment option. Based on its current A-share price, this implies a base deal size of about $5.6 billion.

This is slightly less than the $7 billion talked about when China Everbright Bank first announced its Hong Kong listing plans in February. However, the sole reason for the smaller deal size is the drop in the A-share price since then, including an 8.9% drop in the past three weeks. The bank has made no change to the number of H-shares on sale and the Hong Kong offering will still account for 20.6% of the enlarged share capital.