Aug. 4, 2010 (Chinavestor) China's Everbright Bank, which is planning a $2.9 billion initial public offering for August 18, has selected 30 strategic investors for the IPO. The investors have committed almost $8.9 billion to offering, signaling demand for Everbright shares is in fact robust. The offering now appears to be oversubscribed. The Everbright IPO is expected to be China's second-largest this year trailing only Agriculture Bank of China's (SHA:601288) recent IPO.
Analysts have said that Everbright is the better of the two banks and is selling a lot less shares than AgBank (SHA:601288). Everbright is expected to sell 6.1 billion shares at between 3 and 3.2 yuan apiece. Assuming the shares were sold at 3 yuan apiece, the strategic placement in the IPO was about 6.7 times oversubscribed, based on a Reuters calculation.
Everbright, which is controlled by part of China's sovereign wealth fund, could increase the size of the IPO by 15% to 7 billion shares through an overallotment. The bank is conducting road shows this week in China's four largest cities with the hopes of listing its shares by August 18.
The bank has just under 500 branches across China and has assets of about 12 trillion yuan. The bank is scheduled to unveil the indicative price range for the IPO on Augugust 6 and the final pricing will be decided on August11, Reuters reported.