Bank of China raises $11.2bn via world’s fourth-largest IPO

HONG KONG: The Bank of China, the nation’s No. 2 lender, said on Wednesday it decided to sell off an extra 15% of shares in its initial public offering, making the $11.2bn (E8.7bn) IPO the world’s fourth-biggest ever. The bank had already raised $9.73bn (e7.6bn) by selling 25.6bn shares during the lead-up to its June 1 debut in Hong Kong at the IPO price of HK$2.95 per share.

The lender said it raised another $1.4bn (e1.1bn) after organisers of its IPO used their option — called the “greenshoe” — to issue an additional 3.8bn shares. The organisers can wait a few weeks after the IPO prices before deciding to exercise the option.

Shares of Bank of China soared 15% above its IPO price on its first day of trading. The stock was 19% above its debut price in late afternoon trading on Wednesday. With the additional 15% of shares, the Bank of China IPO ranks as the world’s fourth largest, just behind Deutsche Telekom AG’s $13bn offering on November 17, 1996, according to the research firm Dealogic.

Demand for the shares offered to individual investors during Bank of China’s IPO was 70 times higher than the shares available. The initial issuance, plus the allotment of the additional shares, will leave about 18.9% of Bank of China’s issued capital in public hands.

Bank of China said on Tuesday it also plans a $2.5bn (euro2bn) IPO in Shanghai.