China Merchants Bank to Raise $966 Million Selling Workers Stock

China Merchants Bank Co. plans to sell new shares to employees at less than market price, raising as much as 6 billion yuan ($966 million) and putting in place a motivational reward common at global financial companies.

China Merchants will sell as many as 434.8 million A-shares to employees at 13.8 yuan each, according to a statement to the Shanghai Stock Exchange on Friday. That’s a 12 percent discount to the stock’s Thursday closing price of 15.66 yuan.

The bank’s shares will resume trading in Shanghai and Hong Kong on Monday, according to separate statements.

China Minsheng Banking Corp. in November became the nation’s first lender to offer such incentives. Chinese banks have pledged to change their ownership patterns to meet a central government call for financial restructuring.

The program will improve mid-to-long term incentives, China Merchants said. The plan is subject to approval by regulators. The Shenzhen-based bank will terminate its existing H-share appreciation rights incentive program, according to a separate filing to the Hong Kong stock exchange.

While the government released a trial plan in 2006 to let listed state-owned enterprises issue stock incentives to employees, the finance ministry in 2008 banned listed state-owned financial companies from doing so.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE