CHINA Banking Corp. said it plans to conduct a rights issue to raise up to P15 billion in fresh funds to support its growth initiatives.
“The bank expects to raise proceeds of up to P15 billion for the rights Issue. The additional capital will enable the bank to pursue growth strategies,” China Bank said in a disclosure to the stock exchange on Thursday.
The bank said it will offer common shares from the unissued portion of its authorized capital stock to eligible shareholders, subject to approval of the regulatory agencies
Its investment bank subsidiary, China Bank Capital Corp., will serve as the issue manager, joint bookrunner and domestic underwriter of the deal.
Ricardo R. Chua, China Bank president and chief executive officer, said the stock rights offering “will give us the ammunition to execute our growth strategy” in the next few years.
“With a strong foundation, China Bank is in a good position to pursue further its strategic direction of becoming an even more significant player in key market segments and a stronger partner for our customers, as we continue to deliver better returns to our shareholders,” he added.
The bank has yet to finalize the terms and conditions of the rights issue.
Earlier this month, China Bank approved the increase in capital of its investment bank subsidiary China Bank Capital Corp. (CBCC) to P2 billion from P500 million previously to boost its capability to handle bigger deals.
It also committed to a P1-billion a year capital expenditure for branch expansion and IT-related expenses. As of end-September last year, China Bank was operating 526 branches nationwide, including 160 China Bank Savings branches.
Established in 1920, China Bank is an affiliate bank of the richest man in the Philippines, Henry Sy. It mainly caters to the small and medium enterprises (SME) market while also offering banking services to the corporate, commercial, and retail segments.