Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

PICC Property & Casualty to Raise $944 Million in Rights Offer

May 21 (Bloomberg) -- PICC Property & Casualty Co., China’s biggest non-life insurer, plans to raise 5.8 billion yuan ($944 million) in a rights offer in Hong Kong and China to help meet capital requirements.

The company will offer 1.1 new shares for every 10 existing shares held, according to a Hong Kong stock exchange filing yesterday. PICC said it will price the Hong Kong-listed shares at HK$5.38 each, a 47 percent discount to yesterday’s close, and the domestic shares at 4.30 yuan each.

The proceeds “will be used to strengthen the capital base of the company and to improve its solvency margin,” PICC said in the statement. The Beijing-based company plans to issue 418.2 million H shares and 930 million domestic shares, according to the filing.

Cash flows at China’s life insurers will be squeezed this year by customers canceling contracts out of frustration with low returns and an increase in maturing policies, according to analysts at BoCom International Holdings Co. and Capital Securities Corp. The China Insurance Regulatory Commission said last month that it will strengthen oversight of solvency.

People’s Insurance Company Group of China Ltd., PICC’s parent, will pay 3.99 billion yuan for all of PICC’s domestic rights shares, keeping its stake in the company’s issued stock at 69 percent, according to a separate Hong Kong exchange filing yesterday. PICC’s yuan-denominated shares aren’t listed, according to data compiled by Bloomberg.

American International Group Inc. will subscribe for HK$718.1 million ($92.5 million) of PICC shares to keep its stake at 9.9 percent, according to a statement on the New York-based insurer’s website.

PICC rose 1.2 percent to HK$10.20 in Hong Kong yesterday, before the announcement. The stock has dropped 6.1 percent this year, compared with the Hang Seng Index’s 3.7 percent gain. People’s Insurance, also based in Beijing, was unchanged at HK$4.08 yesterday.

To contact the reporter on this story: Joshua Fellman in New York at jfellman@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.