China Pacific Insurance, China’s third-largest life insurer, has
been given the go-ahead by the China Securities Regulatory
Commission to proceed with an initial public offer (IPO) on the
Hong Kong Stock Exchange (HKSE).
China Pacific, which has a primary
listing on China’s Shanghai Stock Exchange, anticipates issuing up
to 990 million new shares in the IPO at a minimum price of CNY23.52
($3.4) per share. This indicates targeted proceeds of about CNY23.5
billion for the IPO.
The planned IPO is China Pacific’s second
attempt to list on the HKSE, its first attempt in 2008 had to be
aborted in the wake of the global financial crisis.
The flexibility provided by the Hong Kong
listing will particularly suit US private equity firm Carlyle Group
which has a significant equity investment in the insurer. Carlyle’s
close association with China Pacific began in December 2004 when it
paid some $400 million for a 24.9 percent stake in China Pacific’s
life insurance business.
Just prior to China Pacific’s IPO on the SSE
in December 2007, Carlyle exchanged its holding in the life
business for a 19.9 percent stake in China Pacific itself.
Following the IPO, Carlyle’s stake in Pacific Life fell to 17.3
Based on China Pacific’s closing share price
on the SSE on 27 November, Carlyle’s stake was worth $4.65
In the first 10 months of 2009, China Pacific
reported total unaudited premium income of CNY85.4 billion, an
increase of 3 percent compared with the same period in 2008. Of
total the life insurance business, China Pacific Life, was
responsible for premium income of CNY56.2 billion, down 4.6 percent
from CNY58.9 billion reported in the first 10 months of 2008.
In the first 10 months of 2009, China Life,
China’s largest life insurer, reported unaudited premium income of
CNY254.7 billion while Ping An, the country’s second-largest,
reported unaudited life premium income of CNY112.2 billion.