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).