Ping An Insurance Delays US Offering; Hong Kong Offering
Goes Ahead
Ping An Insurance, China's largest private life insurance
company, has decided to indefinitely delay its US offering
because of the current SARS crisis. Originally, the company
had planned to raise capital on the Hong Kong and US markets
at the same time.
Ping An had hoped to raise US$1.5 billion, then lowered
its goal to $1 billion. Now, facing general market uncertainty
because of the SARS crisis, it has decided to indefinitely
delay the US offering.
Because of the stringent rules in the US capital markets,
it had planned to raise capital in the US by issuing ADRs
(American depository receipts), which are backed by China-issued
shares. ADRs are a popular instrument for China and Taiwan
companies in US capital markets.
Two state-owned insurance companies, Peoples' Insurance
Company of China and China Life Insurance, also planned
to raise capital outside of China. Sources say that Peoples'
Insurance of China hopes to raise US$500 million, and
China Life Insurance hopes to raise $2 billion.
Ping An Insurance, which has its headquarters in Shanghai,
was founded in 1988, and employs 150,000 people. It has
300 branches and subsidiaries, and has more than 400 insurance
products, as well as interests in securities and investments.
Its overseas partners include Lincoln National Corporation
of the US and American International Group (AIG).
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