CZBank rights issue to raise 12.9b yuan

China Zheshang Bank (2016) is seeking to raise up to 12.9 billion yuan (HK$14.19 billion) in a rights issue.

The bank will offer three shares for every 10 shares to existing A- and H- share shareholders, with a total of 6.38 billion shares available for placement.

The issue price is 2.02 yuan per A share and HK$2.23 per H share and the total amount raised will not exceed 12.9 billion yuan, the bank said in a statement.

Zhejiang Financial Holdings, the largest shareholder, has committed to subscribe to a pro rata share of the issue.

The pricing was determined using the market discount method based on the trading of its A and H shares prior to the announcement of the issue.

The final price will be determined by the board in consultation with the sponsor based on market conditions.

The funds raised from the placement, after deducting the relevant issuance expenses, will be used to replenish core Tier 1 capital, the bank said.

As of the end of March this year, the core Tier 1 capital adequacy ratio of CZBank was 8.04 percent, and the capital adequacy ratio was 11.49 percent.

CZBank closed at HK$2.63 in Hong Kong last Friday.