HONG KONG--China International Capital Corp., one of China's top
investment banks, is preparing for a Hong Kong listing, people
familiar with the situation said.
The investment bank has invited bankers to pitch on underwriting
its potential initial public offering in the city, the people said,
but no time frame was immediately available. Bankers will meet the
management of CICC in the coming weeks and then CICC will select
banks that can handle the share sale.
CICC, one of China's first investment banks, was set up in 1995
by Morgan Stanley with China Construction Bank Corp, a pioneering
move at the time. But after disputes emerged with the venture's
management over personnel, the firm's culture and its dealings with
other foreign banks, Morgan Stanley became a passive investor in
CICC and sold its 34.3% stake in 2010.
Morgan Stanley sold its stake to a consortium comprising
Government of Singapore Investment Corp.; Great Eastern Holdings
Ltd., the insurer controlled by Oversea-Chinese Banking Corp.;
private-equity firms Kohlberg Kravis Roberts & Co. and TPG
Capital in December 2010. The parties didn't disclose the
consideration of the transaction, but people familiar with the
situation said at the time that the consortium spent about US$1
billion for the stake.
Over the years, the bank, headed by "princeling" Levin Zhu, the
son of Zhu Rongji, expanded beyond underwriting domestic and Hong
Kong initial public offerings and Chinese bonds to be a securities
brokerage with a private equity unit, but advising on capital
markets remains its core business. With China shutting its IPO
market for an over-year-long moratorium until early this year, and
many of the big state-owned IPOs in Hong Kong that it made its name
on done, CICC is no longer as dominant as it used to be among
Chinese investment banks. Princelings are the relatives of
high-ranking Chinese government officials, and Zhu Rongji was the
former premier of China.
CICC's landmark transactions, all of state-owned firms, include
underwriting a US$22.1 billion Shanghai-Hong Kong dual listing in
2010 by Chinese lender Agricultural Bank of China Ltd., still the
world's largest IPO; a US$21.9 billion Shanghai-Hong Kong dual
listing by Industrial & Commercial Bank of China in 2006; and a
US$5.6 billion Hong Kong-New York dual listing by
telecommunications services provider China Unicom Ltd. in 2000.
Currently, Central Huijin Investment Ltd., the domestic
investment arm of China's sovereign-wealth fund, is the single
largest shareholder in CICC holding 43.35%, while Singapore's GIC
holds 16.35%, according to CICC's annual report. TPG owns 10.3% and
KKR holds 10%.
Write to Prudence Ho at prudence.ho@wsj.com
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