CHINA LIFE PLANS 16.77% STAKE IN CITIC SECURITIES, SAYS REPORT

China Life plans to take a 16.77% stake in locally-based stockbroker Citic Securities, in a deal said to be worth at least 4.18bn yuan, reports South China Morning Post . The China Securities Regulatory Commission reported that Citic Securities, which is looking to expand its capital base, had registered to sell 500m new shares to China Life in a private placement. However, A Reuters report said that China Life would be taking a stake of just 6.7%, receiving 200m new shares, with another 300m shares going to “about 10 institutional investors”. If the deal is approved, China Life would become the second-largest shareholder in Citic Securities after state-owned conglomerate Citic Group, which has a 31.1% stake. Under China’s private placement rules, Citic Securities is required to price the stock at a discount of no more than 10% to the average trading price on the Shanghai exchange over the previous 20 days, in this case equal to 8.37 yuan. The stock closed yesterday at 14.47 yuan, up 180% on the year. The newly placed shares will be subject to a 12-month lock-up. Until recently, private placements were not allowed in mainland China. The Citic Securities move will be one of the first under the new private placement rules.