PING AN DOWNSIZES EQUITY RAISING PLAN TO CNY120BN

Chinese insurer Ping An is going ahead with its extensive cash-raising plan, despite apparent opposition from some investors and state officials. However, it has told fund managers that the amount raised would be in the region of CNY120bn ($16.7bn) rather than the originally envisaged CNY160bn, according to a report in China Business News today. Senior executives, including Ping An chairman Ma Mingzhe, were reported to have told fund managers from important investment operations in China that the money raised would be used to boost Ping An’s core businesses, and that the rate of return on acquisitions would be not less than 15%. The company is also believed to want cash to develop a national network for its pension business. One reason for the downsizing of the sum Ping An hopes to raise is that Ping An’s share price has fallen significantly since the plan was first announced, reducing the size of the cash that would be raised through the sale of 1.2bn domestically listed shares. In recent days it has become less certain whether or not the plan will pass at a minority shareholders’ meeting on March 5. HSBC, which owns a nearly 20% stake, has said that it will back the offer, but local reports have said that Ping An’s senior executives were caught unawares by the strong negative reactions to the offer from other quarters. Reasons given for opposition included the size of the offer, the vagueness of purpose, and a feeling that Ping An was trying to exploit the top of a frothy market.