China Pacific Insurance (Group) Co Ltd, the country's third-largest life insurer and partly owned by the Carlyle Group, is set to relaunch its Hong Kong IPO, according to sources, after its first attempt failed last year when markets plunged.
The insurer, which tried to raise more than $4 billion from the Hong Kong market last year, has been in early discussions with several investment banks for a new Hong Kong IPO proposal, said the sources close to the situation.
The new IPO plan was aimed at excluding a minimum listing price condition that had previously been required, said sources who declined to be identified as they were not authorized to speak to the media before an official announcement is made.
The key point is to get listed in Hong Kong, which will be happy news for everyone, said one source.
Carlyle can only exit once China Pacific is listed abroad, while China Pacific also needs to raise more capital to support its business expansion, he added.
Shanghai-headquartered China Pacific and Washington D.C.-based Carlyle both declined to comment.
U.S. private equity giant Carlyle CYL.UL holds around 17 percent of China Pacific, which is already listed in Shanghai.
The sources said Carlyle supported China Pacific's new IPO plan as it aimed to sell part of its stake after China Pacific lists in Hong Kong.
An overseas listing of China Pacific as an exit channel for Carlyle's investment was stipulated in the agreement with Carlyle when the U.S. firm invested in the insurer in late 2005.
Carlyle is unlikely to sell its entire stake, but may offload a small portion initially, in an effort not to draw the attention of Chinese officials and state media, which have complained about some foreign investors behaving like short-term speculators rather than strategic partners in China's financial sectors, said the sources.
Board members, including Carlyle representatives, have been invited to an internal meeting in Shanghai next month, when they are expected to approve the new IPO plan, they said.
China Pacific had pledged not to list shares in Hong Kong at a value below its December 2007 Shanghai IPO of 30 yuan per share, priced during the market's bull run.
Shanghai-listed shares of China Pacific rose 1.7 percent to 27.64 yuan on Wednesday.
Last year, China Pacific hired China International Capital Corp (CICC), Credit Suisse and UBS to advise on its Hong Kong IPO. Morgan Stanley owns one-third of CICC, China's first Sino-foreign investment banking joint venture.
China Pacific needs to appoint new sponsors, which may include CICC, Credit Suisse and UBS but a formal decision on IPO sponsors has not been made yet, said the sources.
(Edited by Chris Lewis and Lincoln Feast)