July 24, from the China Pacific Insurance Company ( "China Taibao, 601601. SH) commitment to the Hong Kong-listed deadline only 50 days. Taibao Dongmi on China to Chen Wei," Financial Times " Confirmed that the board has stopped this year, the pace of IPO in Hong Kong.
Taibao China listed in Hong Kong can not be on schedule, the United States for foreign investors Carlyle Group (The Carlyle Group, hereinafter referred to as "Carlyle"), means that the A shares will be converted to cash in H-shares the dream of strategic investment income or Shattered.
Fatal commitment
Taibao the end of last year China issued A shares, the senior had promised in the first quarter of this year, on September 14 will go to Taibao listed on the Stock Exchange of Hong Kong, issued no more than 900 million H shares. Subsequently, the H-share IPO plan approved by the China Securities Regulatory Commission.
But on July 23, a Chinese Taibao H-share IPO underwriting team sources, "Taibao IPO in Hong Kong early in the preparatory work to a halt."
"Taibao H-share price as the success of the roadshow constraints, before the 'commitment' issue has become the highest bid rate of constraints." Orient Securities analyst Wang Xiaogang analysis.
With this year to A, H-share market's overall weakness, Taibao landing A-shares at the issue price of 30 yuan, not enough time to perform its stock price upsurge on the market to follow all the way down, and March 26 fell below the issue price.
Taibao according to the Chinese A-shares in the IPO "H shares will be issued at not less than A-share issue price," promised to consider A, H shares between the Zhejia Shuai, its H-shares should be the minimum issue price of 33 Hong Kong dollar / Unit Above.
"However Taibao China A-share stock price of around 20 yuan, to enable investors to see its Doomsday in the hope that Hong Kong before landing." Wang Xiaogang said frankly.
Behind-the-scenes promoter
According to Chinese Taibao 2007 annual report, as at the end of 2007, Taibao Taibao life-insurance and the solvency adequacy ratio was 219 percent and 277 percent.
Data show that China-the current solvency and capital adequacy ratios are relatively abundant, there is no urgent financing needs.
China Taibao why the A and H market remains in the doldrums for the case of H-shares listed for efforts »
A subscription Taibao A shares of brokerage firms are exposed: Taibao eager to let China listed in Hong Kong behind the promoter of its foreign investors Carlyle.
Taibao-up A-share prospectus, it is not difficult to find, Taibao commitment to safeguard the interests of investors in A shares, H shares listed in the premium when issued.
"Now Looking back, Taibao referred to as the A-share investors, in fact, the most important thing is to protect the interests of Carlyle, as specifically mentioned in the prospectus, H shares issued upon completion, held by foreign investors A shares will receive regulatory approval later converted into H shares. "Guotai Junan insurance industry analyst Yu-Long Peng respect," Once Taibao successful landing of H-shares, it is foreseeable, Carlyle will hold its A-shares converted to all H-shares, in order to achieve Quanshenertui. Therefore, the H shares listed stranded Taibao, Carlyle will be the biggest 'victims'. "
Thinking dashed
In fact, in Taibao to stop the preparations for the IPO in Hong Kong before, Carlyle has been successful in landing for the Taibao Hong Kong stocks "positive" in trouble.
"This year in March, the Carlyle in Hong Kong frequently call on the investor side, we were met only four times, Carlyle constantly Taibao landing for the H-shares do homework." Hong Kong's Tai Fook Securities, a director General manager said.
Peking University School of Economics, Risk Management and Insurance, an associate professor of ZHU Nan-military analysis, "Carlyle and the other two do not have outside investors, mainly financial investors or the identity of fact, the Carlyle Taibao China shares the cost is not high, Rough calculation investment cost about 50,000 yuan / share, even if China Taibao stock still all the way down, Carlyle will continue to benefit from it. "
"Carlyle to Taibao held by the Chinese A-share cash, must be in four years after the ban period, but no limit on H-shares, which is why the rush to Carlyle A shares held by Taibao replaced by the H-shares The main reason, and the replacement is a prerequisite for Taibao to H shares listed. "ZHU Nan-Army stressed," For Carlyle, two years later from Taibao, it may have its rate of return on investment will be reduced.
China's high-level board Taibao to the "Financial Times" revealed that the company did not completely abandon the planned listing in Hong Kong, once the resumption of H shares issued, Taibao or will consider adjusting the "H Unit issue price of not less than A-share issue Price "This commitment to landing the Hong Kong market as soon as possible.
But the "September 14" Doomsday ago, the Taibao H-shares listed on the possibility of almost zero, Carlyle cash in the wishful thinking come to nothing.
In a financial institution to introduce foreign investors were questioning the present, the Chinese Taibao the introduction of pure profit for the purpose of Carlyle as its strategic investors, as well as talks between the two countries, China Taibao made many commitments, the present situation are worth Reflection.
Background
Taibao Carlyle and the difficult foreign-related marriage
Summer 2002, Carlyle began with Taibao life insurance contacts. Taibao Jin Hong, general manager of the life insurance open to tell Carlyle, life insurance Taibao the purpose of introducing strategic investors, first, want capital injection to fill the Licha Sun formed by the solvency gap and the second is to improve the corporate governance structure, to the international Of the side.
Carlyle Taibao life insurance due diligence on the survey results show that the problem left by history Lici Sun Life Insurance Taibao indeed lead to capital is weak, the funding gap larger macroeconomic situation and the impact of increasing competition in industry is an indisputable fact.
The end of 2003, the two sides on the direction of joint ventures, management intervention, and other aspects of the initial memorandum of understanding reached, but there are still many details of their differences.
On the one hand, established in 1991 in Taibao not always profitable life insurance, life insurance Taibao Carlyle insists that the contingent liabilities of the bad debts, lowering the net asset value per share, a dispute with Taibao. On the other hand, Taibao Group's overall preparations for the listing of the nearly completed, and Carlyle is even more of its preferred shares of Taibao life in a few years after the separate listing.
June 2003, the two sides initialed the participation agreement, but was Taibao major shareholder of Shanghai Baosteel Group's veto, so that after all the contradictions from intensifying.
According to the agreement, Carlyle will buy 400 million U.S. dollars Taibao Life 24.975 percent stake in Carlyle injection at the same time, Taibao also Taibao Life to the capital injection, with the amount of 400 million U.S. dollars equivalent in RMB. However, the final agreement with the difference lies in the fact that Carlyle is not as if the end result of a one-time investment, but three-step plan to inject capital, in advance only 65 per cent, if the performance standards fail, the remaining 35 per cent of the investment cancellation.
To the beginning of 2005, Carlyle and Taibao After twists and turns, each concession: the price, the Board agreed that the Carlyle Taibao five yuan / Unit of the "ultra low", shown at the same time, life insurance companies intent Carlyle also be a one-time injection Funding.
Carlyle Yang Xiangdong, Managing Director of Asia that the negotiations ultimately the key to success lies in Taibao Carlyle to the Board of Trustees believe that the life insurance company's future profitability is the common interest. At the same time, the end of 2005 coincides with the China Insurance Regulatory Commission to improve the life insurance solvency requirements Taibao the deadline, Taibao This is also an important factor in the decision.
2005 Carlyle signed an agreement with Taibao, the first time, China's largest private equity investment end.
Taibao recalled Carlyle and the negotiations were plagued with setbacks, it is not difficult to find, this case reflects the focus of foreign investors in China's financial industry in various aspirations and concerns, and the two sides for the value of the company, a joint venture prospects for the understanding of differences.
As a purely commercial negotiations, Carlyle and Taibao the marriage shows that no government capital injection in the case of reorganization, China's financial enterprises to obtain foreign favor, even if the financial investor input, we need to pay great efforts and Concessions.
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