HONG KONG, Nov 5 (Reuters) - People’s Insurance Group of China (PICC), which owns the nation’s biggest property and casualty insurer, has slashed its fund-raising target for listing in Shanghai by 4 billion yuan ($578.78 million) to about 6 billion yuan.
PICC now plans to issue up to 1.8 billion A-shares in the IPO and use the proceeds to replenish capital, it said on Monday in a notice to the Shanghai stock exchange. In April, PICC said it was aiming to raise 10 billion yuan.
The insurer did not provide a reason for slashing the target.
However, a challenging market is the main reason for the smaller deal size, said a source with direct knowledge of the deal.
Given current market conditions and tightened liquidity, China’s securities regulator won’t let a single issuer raise as much capital as the company initially planned to, as it would siphon off funds from other firms, the source added.
The source declined to be named because he was not authorised to speak to the media.
China’s benchmark Shanghai Composite index dived to near four-year lows last month, prompting multiple government agencies to line up measures to support companies struggling with margin calls and financing.
A PICC listing in China would come more than four years after the company went public in a $3.1 billion offering in Hong Kong. PICC is the parent of PICC Property and Casualty Co Ltd .
China International Capital Corp Ltd and Essence Securities are joint sponsors on the deal and joint bookrunners with CITIC Securities Co Ltd and Goldman Sachs Gao Hua Securities, according to the prospectus posted on the website of China’s securities regulator.
$1 = 6.9063 Chinese yuan Reporting by Hong Kong newsroom and Julie Zhu Writing by Engen Tham in Shanghai and Shu Zhang in Beijing; Editing by Amrutha Gayathri