June 15, 2010 (Chinavestor) The Agricultural Bank of China is preparing to raise $23 billion through an initial public offering that will be the world's largest and list the bank's shares in both Hong Kong and Shanghai.
On Monday, Xinjiang Goldwind Science & Technology Co. scuttled plans for a $1.2 billion IPO. The Hong Kong portion of the AgBank offering sought to raise up to US$14.4 billion, according to the China Post. That includes a 15% over allotment. The Hong Kong portion offering is expected to equal 53% of the IPO.
Industrial and Commercial Bank of China (HKG:1398) previously held the record for the largest IPO, raising $21.9 billion in October 6, 2006. The first successful large bank IPO belongs to Bank of Communication (BoComm) (HKG:3328), where HSBC Plc. (NYSE:HBC) locked in a 20% stake at a significant discount back in June 2005. Bank of China (HKGF:3988) can next a year later, raising as much as $11.2 billion in June 2006.
IPO of Agriculture Bank of China will be different from previous mega bank IPOs in a sense that no major foreign financial institution will underwrite the max. allowed 20% stake. It is a proof that China doesn't need foreign capital nearly as much as back in 2005 and 2006.
AgBank, China's third-largest bank, has 24,000 branches. The Hong Kong-listed shares are expected to debut on July 16.