April 9, 2018 / 11:57 PM / 11 days ago

People's Insurance Group of China plans $1.6 billion Shanghai listing

SHANGHAI/HONG KONG (Reuters) - People’s Insurance Group of China (PICC) (1339.HK), which owns the nation’s biggest non-life insurer, is targeting raising more than $1.6 billion through a Shanghai listing in a long-delayed plan that will be the biggest mainland flotation so far in 2018.

FILE PHOTO: The company logo of the People's Insurance Company of China (PICC) is displayed at a news conference on the company's annual results in Hong Kong, China March 29, 2016. REUTERS/Bobby Yip/File Photo

PICC plans to issue up to 4.6 billion A-shares in a Shanghai initial public offering (IPO) that will raise over 10 billion yuan ($1.59 billion) to replenish capital, the insurer said late on Monday in a notice to the Hong Kong stock exchange.

The listing is expected to take place in June or July, according to one person with direct knowledge of the matter.

A PICC listing in China would come more than four years after the company went public in a $3.1 billion offering in Hong Kong. PICC is the parent of PICC Property and Casualty Co Ltd (2328.HK).

PICC will become the fifth Chinese insurer to be listed in both Hong Kong and a domestic stock exchange, joining the ranks of China Life Insurance Co (2628.HK) (601628.SS), Ping An Insurance Group of China (601318.SS) (2318.HK), China Pacific Insurance Group (601601.SS) (2601.HK) and New China Life Insurance Co (601336.SS) (1336.HK). The five companies are the largest insurers in the country.

    PICC has been planning a domestic listing for a number of years, according to people familiar with the group’s strategy. However, changes in China’s listing rules and temporary suspensions of IPOs after turbulence in China’s stock market had delayed the plan.

    “The domestic stock market has stabilised since last year. It is a good time to return to the A-share market now,” said one of the people.

    Shares of the insurer surged nearly 8.0 percent in Hong Kong on Tuesday before closing 5.2 percent higher. The broader market .HSI finished up 1.7 percent.

    The deal will be underwritten by China International Capital Corp Ltd (3908.HK), Essence Securities, CITIC Securities Co Ltd (600030.SS) and Goldman Sachs Gao Hua Securities, according to the prospectus posted on the website of China’s securities regulator.

    Reporting by Hong Kong newsroom and Engen Tham in Shanghai, Kane Wu and Julie Zhu in HONG KONG; Editing by Stephen Coates and Muralikumar Anantharaman

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