China's CICC Prepares for Hong Kong Listing
HONG KONG--China International Capital Corp., one of China's top investment banks, is preparing for a Hong Kong listing, people familiar with the situation said.
The investment bank has invited bankers to pitch on underwriting its potential initial public offering in the city, the people said, but no time frame was immediately available. Bankers will meet the management of CICC in the coming weeks and then CICC will select banks that can handle the share sale.
CICC, one of China's first investment banks, was set up in 1995 by Morgan Stanley with China Construction Bank Corp, a pioneering move at the time. But after disputes emerged with the venture's management over personnel, the firm's culture and its dealings with other foreign banks, Morgan Stanley became a passive investor in CICC and sold its 34.3% stake in 2010.
Morgan Stanley sold its stake to a consortium comprising Government of Singapore Investment Corp.; Great Eastern Holdings Ltd., the insurer controlled by Oversea-Chinese Banking Corp.; private-equity firms Kohlberg Kravis Roberts & Co. and TPG Capital in December 2010. The parties didn't disclose the consideration of the transaction, but people familiar with the situation said at the time that the consortium spent about US$1 billion for the stake.
Over the years, the bank, headed by "princeling" Levin Zhu, the son of Zhu Rongji, expanded beyond underwriting domestic and Hong Kong initial public offerings and Chinese bonds to be a securities brokerage with a private equity unit, but advising on capital markets remains its core business. With China shutting its IPO market for an over-year-long moratorium until early this year, and many of the big state-owned IPOs in Hong Kong that it made its name on done, CICC is no longer as dominant as it used to be among Chinese investment banks. Princelings are the relatives of high-ranking Chinese government officials, and Zhu Rongji was the former premier of China.
CICC's landmark transactions, all of state-owned firms, include underwriting a US$22.1 billion Shanghai-Hong Kong dual listing in 2010 by Chinese lender Agricultural Bank of China Ltd., still the world's largest IPO; a US$21.9 billion Shanghai-Hong Kong dual listing by Industrial & Commercial Bank of China in 2006; and a US$5.6 billion Hong Kong-New York dual listing by telecommunications services provider China Unicom Ltd. in 2000.
Currently, Central Huijin Investment Ltd., the domestic investment arm of China's sovereign-wealth fund, is the single largest shareholder in CICC holding 43.35%, while Singapore's GIC holds 16.35%, according to CICC's annual report. TPG owns 10.3% and KKR holds 10%.
Write to Prudence Ho at email@example.com