China Everbright Bank Co yesterday said it has got regulatory
approval for financial restructuring.
"The detailed reorganization plan will be further discussed by
and are subject to approval of the board and shareholders," the
bank said in a statement on its website, without elaborating.
As early as in December, market sources had said Central Huijin,
the central bank's investment arm, would pump 20 billion yuan into
the Beijing-based lender to strengthen its balance sheet. But
neither of the parties confirmed the move.
Industry analysts believe the long-awaited bailout plan will
pave the way for the bank to seek strategic investors and an
eventual public listing.
The bank has hired China International Capital Corp and Morgan
Stanley to find a foreign strategic investor before its planned
initial public offering that may raise at least US$1 billion next
year, Bloomberg reported yesterday.
Standard Chartered Plc had been in talks with China Everbright
for three years to be a strategic partner but restructuring was a
stumbling block.
The complicated shareholding structure and bad assets generated
over time makes the bank's restructuring a difficult process, said
an analyst who declined to be named.
The bank, 45.6 percent owned by China Everbright Group and its
Hong Kong-listed unit, is saddled with debts partly because of its
takeover of the troubled China Investment Bank in 1999.
The bank is now one of the weakest among the country's 13
national joint-stock commercial banks, with a non-performing loan
ratio of over 6 percent at the end of 2006, compared with the
average of 3 percent for the 13 banks.
If the bailout plan goes through, the bank may get listed as
early as next year, the analyst said.
The bank is likely to be a good target for foreign investors for
its scale and geographical reach in the country.
Total assets of the bank stood at 595.1 billion yuan at the end
of last year and net profit for 2006 increased 22 percent to 2.76
billion yuan.
(China Daily August 9, 2007)
