Banking News
- No new share reform plan yet: SDB
Date: 23-Jan-2007 Sources: (Shenzhen Daily)
SHENZHEN Development Bank (SDB), which is effectively controlled by U.S. private-equity firm Newbridge Capital, hasn't yet worked out a new plan to convert its nontradable shares into tradable stock.
'We have discussed with our shareholders on the issue, but have yet to reach any agreement,'the Shenzhen-listed bank said in a statement filed to the Shenzhen Stock Exchange yesterday.
In July, holders of Shenzhen Development Bank's tradable shares rejected a plan that promised them a cash dividend depending on the bank's share-price movement.
The share reform plan is crucial for the Shenzhen-based bank, which needs to raise funds to boost its dwindling capital adequacy ratio. The bank's capital adequacy ratio was 3.59 percent at the end of September, below the regulatory minimum of 8 percent.
The China Securities Regulatory Commission is only allowing companies that have completed their share reform to carry out fundraising activity.
Shenzhen Development Bank sold a 17.89 percent stake in late 2004 to Newbridge Capital, a unit of Texas Pacific Group. Newbridge Capital is now the largest shareholder of the Shenzhen-based bank.
In late 2005, U.S. financial services and industrial firm General Electric Co. agreed to buy a 7 percent stake in Shenzhen Development Bank for US$100 million. The deal is still pending approval by Chinese regulatory authorities.
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