The People's Insurance Company (Group) of China, which is the parent of the country's largest nonlife insurer PICC P&C, has proposed to apply for an initial public offering and listing of the company's shares on the Shanghai Stock Exchange.
The proposed share offering was approved at a board meeting held on 16 May 2017 and will be submitted to shareholders at an extraordinary general meeting for consideration and approval.
In a statement, the People's Insurance Company said that subject to regulatory requirements regarding the minimum issuance size on the Shanghai Stock Exchange, the number of 'A' shares to be issued shall not exceed 4,598,807,861, representing 9.78% of the total share capital of the company immediately after the issuance and shall not include any shares that may be issued under the over-allotment option. In Chinese stock market parlance, 'A' shares are denominated in yuan and traded on the Shanghai and Shenzhen stock exchanges.
The company said that it may authorise the lead underwriters to offer the shares of not more than 15% of the amount to be underwritten pursuant to the overallotment option at the same issue price. 'A' shares will be issued as new shares.
The company's directors consider that the share offering will further enrich its capital base, optimise its corporate governance structure, develop domestic and international financing platforms and improve the capital strength and market competitiveness of the company.
The company was listed in Hong Kong in 2012 following an IPO which raised US$3.1 billion.
In a separate statement, the company said that its property and casualty division, PICC P&C, had signed a new reinsurance agreement with PICC Re. The deal will see PICC P&C cede property premiums to PICC Re in exchange for commissions.
PICC will cede up to CNY50 billion ($7.3 billion) of its book per year in exchange for a maximum of CNY16 billion in commissions. Both companies are owned by PICC Group. The agreement commenced on 10 March 2017 and expires on 31 December 2017.