PICC Said to Plan $3 Billion H.K. IPO, Delaying Shanghai

PICC Said to Plan $3 Billion Hong Kong IPO, Weigh Shanghai Delay
PICC had aimed to raise as much as $5 billion through the IPO in Hong Kong and Shanghai, people familiar with the deal said in May. Photographer: Nelson Ching/Bloomberg

People’s Insurance Company (Group) of China may seek as much as $3 billion in an initial public offering in Hong Kong in October or November while postponing a Shanghai listing, two people with knowledge of the matter said.

The state-owned insurer, which initially planned a dual listing in the two cities, may put the Shanghai portion of the sale on hold as Chinese regulators have yet to approve the deal, according to the people, who asked not to be identified as the deliberations are private.

PICC had aimed to raise as much as $5 billion through the IPO in Hong Kong and Shanghai, people familiar with the deal said in May. That would have made it this year’s third-biggest stock market debut after Facebook Inc. and Japan Airlines Co., and the largest in Hong Kong since October 2010, data compiled by Bloomberg show.

The company, based in Beijing, received approval from the Hong Kong stock exchange in June to sell shares in the city, according to the people. Chinese regulators may be slowing IPO approvals to avoid putting additional pressure on a stock market that’s lost 19 percent in the past year, the people said. PICC may still try to sell shares in Shanghai after listing in Hong Kong, they said.

Proceeds from the IPO may boost PICC Group’s ability to inject more capital into its publicly traded unit, PICC Property & Casualty Co., which is China’s biggest non-life insurer and contributes more than half of the parent company’s profit.

Feng Jianqiang, PICC Group’s head of media relations, couldn’t be reached for comment yesterday. A phone call to the securities regulator’s press office went unanswered.

Fifth Largest

China’s national pension fund invested 10 billion yuan ($1.6 billion) for a stake of about 11 percent in PICC Group, paving the way for its IPO, Chairman Wu Yan said in an e-mailed statement in June 2011. The state-owned group also has units in life insurance, health insurance, asset management and insurance brokering.

PICC Group is ranked fifth in the country with life insurance premium income of 45.4 billion yuan in the first seven months of 2012, according to data on the website of China’s insurance regulator. China Life Insurance Co. was first with 203.3 billion yuan, the website shows.

New China Life Insurance Co., the nation’s third-largest life insurer, raised $1.9 billion in a December IPO in Shanghai and Hong Kong to bolster its capital and solvency ratios. Its shares are down 20 percent since then.