Shenzhen bank share reform gets go-ahead
(Shenzhen Daily)Updated: 2007-06-14 13:37
After a delay of nearly a year, shareholders in Shenzhen
Development Bank have approved a plan to reform its shareholding structure,
clearing the way for the bank to raise fresh capital to support its rapid
growth.
The bank, nearly 18 percent owned by US investment firm Newbridge Capital, is one of a small number of listed firms that have not completed the reform, which converts non-tradable shares owned by the State into tradable shares.
Public shareholders refused to approve an initial reform plan last July, causing Shenzhen bank to miss regulators' end-2006 deadline for companies to launch the reform.
The delay has prevented the bank from raising fresh capital and proceeding with a deal, agreed in 2005, for a unit of General Electric to buy a 7.3 percent stake in it for US$100 million.
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The bank offered a 1-for-10 bonus issue of shares as well as 1.5 warrants for every 10 shares held. Each warrant will let shareholders buy a Shenzhen Development Bank share at 19.00 yuan, a 34 percent discount from the last traded market price of 28.69 yuan.
The Securities Times quoted sources close to the bank as saying raising fresh capital would now be a priority. The bank's capital adequacy ratio was just 3.71 percent at the end of last year, below regulators' requirement of 8 percent.
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