China Merchants Bank rights issue draws closer

The bank received CSRC approval last month and its A- and H-shares are now trading largely on par, which improves the chances of a successful deal.

An 11.6% rally in China Merchants Bank’s Hong Kong-listed shares over the past two sessions has greatly improved the chances that the Chinese lender will finally be able to complete its long-awaited rights issue. At the very least it has removed one of the potential hurdles for the transaction.

The bank has proposed to raise up to Rmb35 billion $5.68 billion from the sale of A- and H-shares to its existing shareholders. About 82% of the offering will be in the form of Shanghai-listed A-shares, while the remainder will be offered to the holders of the bank’s Hong Kong-listed H-shares, which is in line with the current split of its...

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