Slow revamp bogs down insurer's IPO
China Pacific Insurance, the nation's third-largest life insurer, will delay its H-share initial public offering until the second half of 2007, due to its slow restructuring, market sources said.
KatherineNgandReuters
Thursday, November 30, 2006
China Pacific Insurance, the nation's third-largest life insurer, will delay its H-share initial public offering until the second half of 2007, due to its slow restructuring, market sources said.
Analysts said the insurer has faced increasing competition from China Life (2628) and Ping An Insurance Group (2318) in the mainland life insurance market since the two rival companies listed in Hong Kong.
"The gap between China Pacific's market share with New China Life, the fourth-largest life insurance company in China, has narrowed since China Life and Ping An have taken more market share since their listings," a Hong Kong insurance analyst said.
China Pacific initially planned to have its US$1 billion (HK$7.8 billion) H-share sale early next year. This would have allowed it to compete with rivals Taikang Insurance and New China Life by gaining earlier access to the Hong Kong market.
UBS and China International Capital Corporation are the sponsors for the IPO, but neither could be reached for comment Wednesday.
According to a Reuters article Wednesday which cited unnamed sources, China Pacific has terminated its relationship with auditor PricewaterhouseCoopers, which has been working on its IPO issue for the past four years.
The Reuters report also mentioned that China Pacific intended to hire Kind & Wood as the IPO legal consultant. China Pacific and PricewaterhouseCoopers both declined to comment.
China Pacific faced a significant management reshuffle in July when former chairman Wang Guoliang resigned after eight years' service.
At the time, the market speculated that Wang's resignation was due to a Beijing-led shake-up of state-run financial firms.
The position was later filled by Gao Guofu, an ex-general manager of the Shanghai government-run Shanghai Chengtou Corporation.
The Reuters report also cited unnamed sources as speculating that China Pacific will renegotiate the US$280 million deal to sell about 25 percent of its non-life insurance business to Insurance Australia Group before its IPO listing.
China Pacific sold its 25 percent stake in its life insurance arm to Carlyle Group and Prudential Financial for US$400 million last year.
Both the life and non-life insurance arms would be among the China Pacific assets to be listed.