PICC Preparing for Dual Listings

The People's Insurance Company (Group) of China Ltd. (PICC) recently inked a contract to introduce the National Council for Social Security Fund (NCSSF) as a shareholder.

Under terms of the contract, the fund will invest CNY 10 billion into the insurer, with a seat at the latter's board. After that, the insurer will have two shareholders, including the Ministry of Finance (MoF) and this will allow it well meet the nation's corporate laws. Sources said previously that the fund planned to take an eight percent to ten percent stake in the latter and provided that the latter's total capital stake stands at CNY 30.6 billion, the price for the fund to buy into the insurer will be CNY 3 to CNY 4 per share.

PICC was established in October 2009 and soon after that, it gained approval from the State Council, the Chinese cabinet, to launch an IPO on both the Mainland China stock market and the Hong Kong stock market at a proper time. Its aggregate revenue hit CNY 264.7 billion last year, representing a yearly rise of 37 percent. According to industry observers, the fund's buy-into will not only help boost the insurer's dual listings but also well solve problems regarding to registered capital replenishment of the target's subsidiaries. PICC Property and Casualty Co. Ltd. (SEHK: 2328), the property unit of the insurer, has begun making money and currently, it mainly raises solvency with profit and proceeds from issuing subordinated bonds. The group's life insurance unit expanded fast in recent years and has triggered a new round of financing plan.

In addition, the insurer has begun consolidating assets related to Huawen series companies, an effort to pave the way for the dual listings. PICC Investment Holding Co. Ltd., a subsidiary of it, put up a 55 percent stake in China Huawen Investment Holdings Ltd. as well as a 54.21 percent stake in Guanglian (Nanning) Investment Holding Co.. Ltd. up for sale at the tag of about CNY 1.27 billion and CNY 867 million each at the Beijing Financial Assets Exchange on June 6. The deadline for both deals is July 5. Both targets each holds a 50 percent stake in Shanghai New Huawen, which serves as the biggest shareholder of Shanghai New Huangpu Real Estate Co., Ltd. (SHSE: 600638) via controlling a 13.48 percent stake in it. New Huangpu has a list of futures, securities brokerage and trust subsidiaries, with Zhongtai Trust Co., Ltd. and Dacheng Fund Management Co., Ltd. as the core.