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February 29, 2008 |
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SHANGHAI PUDONG: To Raise CNY32.5 Billion from Share Sale Shanghai Pudong Developmetn Bank Co. said in reports that it plans to raise up to CNY32.5 billion (US$4.6 billion) through the issuance of more shares in order to increase capital. As reported yesterday, the bank said in a statement file with the Shanghai Stock Exchange that details of the planned sale will be disclosed after the company's board meeting. The meeting date, however, was not disclosed. According to Bloomberg News, the bank will sell up to 800 million shares within one year after the shareholders' approval of the plan. The Wall Street Journal said that an unnamed source told the paper that the offering was originally for CNY40 billion but lowered it due to the market's "dramatic" reaction to its plan. Bloomberg adds that investor concerns over earnings dilution for the past six days caused the bank's shares to lose 20% of their value. "The market is too skittish and has over-reacted to its share sale over the past few days," Zhu Mingjian, a Shanghai-based analyst at Fortis Haitong Investment Management Co., which manages CNY45 billion yuan, including Pudong Bank shares, told Bloomberg. "Pudong Bank's share sale is justified by its need to finance business growth and sustain profit." Headquartered in Shanghai, China, Shanghai Pudong Development Bank Co., Ltd. -- http://www.spdb.com.cn/ -- is a commercial bank involved in personal banking, corporate banking, and inter- bank business. The bank also offers Internet banking and telephone banking. Fitch Ratings on March 12, 2007, upgraded the Support ratings of Shanghai Pudong Development Bank to 3 from 4, reflecting the improved ability of the government to support domestic financial institutions and the close relationship between the bank and the central and local governments. At the same time, the agency affirmed the bank's individual rating at D. The bank, as of May 4, 2007, also carries Moody's Ba1 rating for financial strength rating. |
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