Prudential 14 Billion 500 Million Pounds Rights Issue &Nbsp; CIC Li Jiacheng Participates In Sub Underwriting.

Huge financing of 14 billion 500 million is not a simple task.

In the past two days, the 02378.HK and the investment banking team participating in the rights issue have made a lot of trouble. How to find buyers for the 14 billion 500 million pound share issue is the biggest challenge before them.

In addition to the three international investment banks, such as Credit Suisse, HSBC and J.P. Morgan, the joint venture sponsors, joint global coordinators and joint account managers, there are 30 institutions as agents. The team has almost covered all the well-known investment banks in the world, including the two Chinese funded agencies of BOC and ICBC, which are responsible for sub underwriting.

More recently, more than a few days ago, the underwriting group composed of J.P. Morgan, HSBC and Credit Suisse has successfully found a group of Hongkong, Southeast Asian riches and sovereign funds and Chinese funded institutions as sub contractors, including Chairman Li Jiacheng of Changjiang industrial group, chairman Zheng Yutong of new world (600628), and Chinese home ownership Joseph Lau, while CIC and Prudential's partner in China CITIC Group were also invited to be sub contractors.

"Sub sale is a normal thing."

A person close to the underwriting group told our reporter that he was unwilling to confirm whether the above persons and agencies were involved in sub underwriting.

Rich and institutional divide

"It was because someone wanted to buy that it decided to come to Hongkong."

On the 20 day, Zheng Jiahua, a joint director of the Hongkong World Bank, said in an interview with our reporter that he believed that the contribution of the rich and Chinese institutions was not the result of Prudential seeking buyers, but rather the reason why Prudential came to Hongkong.

"Investors were willing to buy Prudential shares at the very beginning so that they could have confidence in listing in Hongkong."

Zheng Jiahua said.

"Maybe a lot of Chinese insurance institutions will also participate in the rights issue," another market source told our correspondent.

"We usually underwrite part of the stock according to our own risk tolerance," the person close to the underwriting group revealed.

According to the underwriting mechanism, the Underwriters will get a certain percentage of commission. If the original shareholders abandon their stock options, the Underwriters need to buy shares in this way. If all the former shareholders are involved in the rights issue, the underwriter will take the Commission.

It is reported that Prudential undertook the form of underwriting in 2009, which was followed by the Hong Kong 0005.HK holdings of HK $141 billion 700 million in the century, when Li Jiacheng, Zheng Yutong and Joseph Lau also participated in sub underwriting.

At that time, the rights issue was fully subscribed, and a few tycoons earned a net Commission of about 1.75%.

At that time, Li Jiacheng undertook about HK $2 billion 340 million in rights issue, that is, a commission of HK $41 million.

According to Hong Kong media, the number of shares that have been underwritten in the market has been 1 to 2 percent lower than the original subscription rights, which means that the market has a higher enthusiasm for sub underwriting.

Under the Prudential scheme, the Underwriters' Commission will be at least 2.75%, up to 3.25%, and the Underwriters and the joint global coordinators can get a maximum Commission of about HK $5 billion 300 million at about HK $164 billion 500 million.

According to Hong Kong media, sub contractors can also get a commission of about 2%, which is higher than the average 1.5%.