China Pacific Ocean Insurance (Group) Co.,
the nation's third-largest insurer, may raise as much as 30
billion kwai ($4.07 billion) in the greatest initial public
offering by a Chinese insurer.
The company, 19.9 percentage owned by companies controlled by
funds managed by the Thomas Carlyle Group, is offering 1 billion new
shares at 27 kwai to 30 kwai apiece in the Shanghai offering,
said four people familiar with the sale, who asked not to be
identified before an functionary statement.
The top end of the scope for the sale of a 13 percentage stake
values the Shanghai-based company at as much as $31 billion,
according to Bloomberg computations based on information provided
in a share sale document.
Pacific Ocean Insurance follows bigger peers, People'S Republic Of China Life Insurance
Co. and Ping River An Insurance (Group) Co., which sold a concerted $9.1
billion of shares in the metropolis in the past year. People'S Republic Of China have urged
its biggest fiscal establishments to sell shares domestically to
broaden the scope of investings available to mainland citizens.
Shanghai-listed shares of People'S Republic Of People'S Republic Of China Life and Ping River An have got more
than tripled since trading began as investors flocked to the only
two insurance companies listed in mainland China after the benchmark CSI 300
Index nearly tripled in the past year, boosting insurers'
investment income and profits.
'Exaggerating Sentiment'
''In any market, coverage pillory are always multiplying and
exaggerating marketplace sentiment,'' said Gabriel Gondard, who helps
manage about $10 billion as deputy sheriff head investing military officer at
Shanghai-based Luck SGAM Fund Management Co. ''It's not a
surprise that when the marketplace is hot, the coverage pillory are
even hotter.''
The 17.3 percentage interest to be retained by companies
controlled by the Thomas Carlyle finances would be deserving 40 billion yuan,
seven modern times the 5.69 billion kwai it paid. Dorothy Lee, a Hong
Kong-based spokeswoman for Carlyle, declined to comment.
The Carlyle-led foreign investors, combined, are Pacific
Insurance's second-largest shareholder, behind Baosteel Group
Corp., the nation's biggest steelmaker, according to the document.
People'S Republic Of People'S Republic Of China International Capital Corp. and UBS AG's China venture
are arranging Pacific Ocean Insurance's sale.
Liu Li, a Shanghai-based spokeswoman for Pacific Ocean Insurance,
couldn't be reached in her office. Jessie Sun, a CICC spokeswoman
in Beijing, and Chris Cockerill, a UBS spokesman in Hong Kong,
declined to comment.
Record Stock Sales
Pacific Ocean Insurance's initial public offering may crest a record twelvemonth of public
offerings in China. Chinese companies have got sold 439.07 billion
yuan of stock this year, more than than in the former six years
combined, according to information compiled by Bloomberg.
Pacific Ocean Insurance commands the nation's third-largest life
insurer and second-biggest property and casualty insurance
underwriter. It commanded a 9.5 percentage share of China's life
insurance gross sales in the first one-half and an 11.6 percentage share of
non-life policies, the written document said.
It derived 65 percentage of its coverage premium gross from life
insurance in the first half.
The Carlyle-led foreign investors, including New Jersey-
based Prudential Financial Inc., originally agreed to purchase a 25
percent interest in Pacific Ocean Insurance's life unit of measurement in December 2005
for 3.3 billion yuan.
The group, which swapped their interest in the life unit of measurement for a
stake in Pacific Ocean Insurance earlier this year, helped bend the
insurer's 1.1 billion kwai loss in 2004 into a 3.8 billion yuan
profit in the first one-half this year.
Use of Proceeds
Pacific Ocean Insurance is selling shares to better its solvency
ratio, an index of ability to pay out possible claims, and
support ''long-term development,'' it said in the document. It
may come in other fiscal services related to coverage and
insurance-asset management, it added.
It may sell as many as 900 million more than shares in Hong Kong
at a future day of the month at a terms no less than the Shanghai stock, it
said in the document.
At the top of the range, the Shanghai initial public offering will be the
fourth-largest public share sale by an coverage company
worldwide since at least 1999, according to Bloomberg data.
To reach the newsman on this story:
Bei Hu in Hong Kong at .
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