Industrial and Commercial Bank of China announced on September 6th that its board has approved a proposal to issue A-shares to specific investors, aiming to raise no more than 100 billion yuan to bolster its core Tier-1 capital. The targeted recipients include China's Ministry of Finance, China National Tobacco Corporation, and its subsidiaries, with the proceeds intended solely for capital enhancement after deducting issuance costs. The move is subject to regulatory approvals before implementation.
Key terms of the proposed issuance: The bank will issue domestic RMB ordinary shares (A-shares) with a par value of 1.00 yuan per share. The placement will be conducted privately, with the timing dependent on approval from the Shanghai Stock Exchange and registration by the China Securities Regulatory Commission. If regulations change, ICBC will adjust its approach accordingly.
The total fundraising is capped at 100 billion yuan (inclusive), with all proceeds after fees going toward core Tier-1 capital. The final amount will align with regulatory approvals. The Ministry of Finance plans to subscribe 70 billion yuan, while China National Tobacco Corporation and four of its affiliates will each contribute between 5 billion and 10 billion yuan. Subscription amounts may be adjusted based on the final approved capital scale, with all investors signing conditional share subscription agreements to purchase the new shares in cash.
Pricing mechanism: The pricing benchmark date is set as the first day of the issuance period, with the issue price not lower than the average trading price of ICBC's A-shares over the 20 trading days preceding that date, rounded to two decimal places. Adjustments will be made for any ex-dividend or ex-rights events during this period. The final price will be determined by the board, authorized by shareholders, in consultation with sponsors and underwriters, following regulatory guidelines and market conditions. Should policy changes occur between the board resolution and issuance date, the price will be revised accordingly.
Share count and lock-up period: The number of shares to be issued will be determined by dividing the total proceeds by the issue price, capped at 10% of the bank's existing share capital. Any fractional shares will be rounded down, with residual amounts added to capital reserves. The final count will be set post-regulatory approval. All subscribed shares, including those derived from stock dividends or capital reserve conversions, will be subject to a five-year lock-up period starting from the registration date, unless regulators stipulate otherwise. Post-lock-up transfers will comply with prevailing laws and regulations.
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