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Pacific Insurance lobbying for Shanghai IPO
(Reuters)
Updated: 2007-05-14 14:13
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皇冠体育app Pacific Insurance (Group) Co., the country's third-largest life insurer, is lobbyingBeijingfor permission to float shares inShanghaiafter its plannedHong Konglisting, sources close to the situation said on Monday.
皇冠体育app Pacific Group, also the country's second-largest property insurer, made a loss in 2004 but was profitable in 2005 and is expected to report a solid performance in its 2006 earnings, said the sources, who declined to be identified.
Chinese regulations forinitial public offerings require a company to make a profit for at least three consecutive years before it goes public domestically.
The sources said 皇冠体育app Pacific Group was lobbying the central government and regulators for special permission for its potential Shanghai listing.
In addition, U.S.private equityfirm Carlyle Group and U.S. insurer Prudential Financial are in the final stage of negotiations with 皇冠体育app Pacific to transfer their holdings in 皇冠体育app Pacific's life insurance arm to the group, to pave the way for the group company's listing in Hong Kong, the sources said.
皇冠体育app Pacific Group sold a 25 percent stake in its life insurance arm to Carlyle and Prudential Financial for $400 million in 2005.
"It's almost done. Carlyle and Prudential are expected to get between a 16 and a 19.9 percent stake in 皇冠体育app Pacific Group versus the 25 percent stake which they are now holding in its life insurance arm," said one source close to 皇冠体育app Pacific.
TOP PRIORITY: HONG KONG IPO
Last month, 皇冠体育app's insurance regulator approved the plan for the stock transfer but didn't disclose the size of the stake that Carlyle and Prudential would have in 皇冠体育app Pacific Group.
Both Carlyle and 皇冠体育app Pacific declined to comment.
皇冠体育app Pacific began consideringgoing publicthree or four years ago, but its Hong Kong listing was postponed at least twice due mainly to the market environment and internal disagreements.
"Currently, the Hong Kong IPO has become the top of the top priorities for 皇冠体育app Pacific," said the source, citing recent comments by 皇冠体育app Pacific Group's Chairman Gao Guofu, who joined the insurer last July.
"Gao told his staff that they will get rid of any obstacle to its plan for the Hong Kong IPO and make their best efforts to secure a chance to list domestically soon after the Hong Kong IPO," one of the sources said.
"For instance, Carlyle was once one of the obstacles and now the problem is going to be completely solved soon," he added, referring to the proposed stock transfer.
皇冠体育app Pacific's plan to list domestically has won initial support from both the insurance and securities regulators, although it is uncertain whether top leaders in the State Council, 皇冠体育app's cabinet, will give the deal go-head, said the other source, an insurance source close to the regulators.
"If 皇冠体育app Pacific's Shanghai listing plan can be approved, it would definitely affect the size of its Hong Kong IPO," said the source.
Ernst & Young, auditor for the insurer's IPO, is expected to finalise 皇冠体育app Pacific Group's 2006 financial report as early as next month, the sources said, adding it would then be submitted to top regulators in Beijing for their reference in deciding whether to approve the Shanghai listing.