Carlyle portfolio company plans second listing

This is Shanghai-listed China Pacific Insurance's second attempt to list in Hong Kong after its plans to reportedly raise more than $4bn last year was scuppered by weak markets.

China Pacific Insurance, a portfolio company of global buyout firm The Carlyle Group, is re-launching an initial public offering (IPO) on the Hong Kong Stock Exchange. The company's plans to issue shares and raise more than $4 billion in Hong Kong last year were scuppered by weak capital markets, with its plan to do so expiring in September 2008.

China Pacific Insurance now intends to raise approximately RMB24 billion ($3.5 billion; €2.5 billion) with the public offering, according to Reuters.

It is unclear whether Carlyle will have its 17 percent stake in the company diluted. Carlyle declined to comment.   

The IPO will take place within 12 months, if shareholder approval is obtained in a meeting to be held at the end of August, according to a China Pacific Insurance statement.  The capital will be used to scale up the business, the company said.

The Shanghai-listed Chinese insurer will offer not more than 1 billion H shares at a price not lower than the average price of its A shares in the last 20 trading days. The H shares, which are shares of Chinese companies trading on the Hong Kong Stock Exchange, are expected to be priced at about RMB23.50, based on the average closing prices of the company’s A shares over the past 20 days, Wang Xiaogang, an insurance analyst at Shanghai-based Orient Securities told Reuters. A shares are shares traded in RMB on the Shanghai and Shenzhen stock exchanges.

China Pacific Insurance:
plans to list on HKSE

China Pacific Insurance’s share price rose about 3 percent on the news. Its share prices climbed from RMB 27.88 last Thursday to RMB28.81 the following day when the news was announced. The company is presently trading at RMB29.06.

The current plan for the IPO will not include a minimum listing price, a condition that played a significant role in the delay of the previous plan, sources told Reuters. The company has promised not to list its shares in Hong Kong at a price lower than its December 2007 IPO of RMB30 per share, Reuters said.

Carlyle acquired a roughly 24 percent stake in China Pacific Life Insurance, a subsidiary of China Pacific Insurance in December 2005. Before the company was listed on the Shanghai stock exchange, a Carlyle-led consortium made an additional investment into the subsidiary, subsequently exchanging its stake for an approximately 17 percent stake in China Pacific Insurance.

The investment was made out of the $750 million Carlyle Asia Partners, the firm’s first Asia-focused buyout fund. Carlyle is currently raising its third Asia-focused buyout fund, which initially went to market with a reported target of $4 billion. This June, the firm closed Carlyle Asia Growth Partners IV on $1.04 billion. The fund’s predecessor closed on $668 million in 2006.