April 17, 2014 5:21 am JST

Citic realigning for Hong Kong 'listing'

YASUO AWAI, Nikkei staff writer

HONG KONG -- Chinese state-owned investment company Citic Group will effectively bring itself to the Hong Kong stock market by concentrating its assets in a unit already listed there, broadening Citic's fundraising options.

     The subsidiary, Citic Pacific, will issue 286 billion Hong Kong dollars ($37.72 billion) of shares to acquire an intermediary holding company that owns shares in group units including banks and securities companies. This will mark the largest share issuance ever for a corporate reorganization in China.

     Citic will buy HK$223 billion of the stock -- more than 75% of the total. The other HK$63 billion of shares will be set aside for institutional investors to comply with the bourse's requirement that at least 15-25% of outstanding shares be traded on the market.

     By effectively listing on the Hong Kong stock market in this way, Citic Group will gain flexibility in raising funds for mine development and other businesses, said Chang Zhenming, who heads both Citic and Citic Pacific.

     The move is in line with President Xi Jinping's drive to overhaul state-owned enterprises, Chang told a news conference held here on Wednesday. "Citic is always at the center of reform and development in China," he said.