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Citigroup’s Chinese partner plans S$2.2 billion share sale

SHANGHAI - Orient Securities, Citigroup’s Chinese partner in an investment banking venture, is seeking 10 billion yuan (S$2.2 billion) in what could be the nation’s largest initial public offering in more than three years.

SHANGHAI - Orient Securities, Citigroup’s Chinese partner in an investment banking venture, is seeking 10 billion yuan (S$2.2 billion) in what could be the nation’s largest initial public offering in more than three years.

Orient Securities plans to sell as many as 1 billion shares in Shanghai, the brokerage said today (March 3) in IPO documents posted on the website of the city’s stock exchange. Proceeds from the sale will be used to expand businesses including wealth management, margin financing and investment banking, Orient said.

Chinese brokerages are raising capital after last year’s rally in equities pushed the amount of money clients borrowed for stock investing to record levels. Outstanding margin loans at the nation’s brokerages totalled 1.15 trillion yuan (S$248 billion) as of Feb 26, almost triple the amount at the end of June last year, China Securities Finance Corp data show.

Orient Securities expects its first-time share sale to raise about 10 billion yuan, according to the offer documents. The deal could be China’s largest IPO since Power Construction Corp’s 13.5 billion yuan offering in September 2011, according to data compiled by Bloomberg.

The price of the Orient Securities offering will be decided after a meeting with investors on March 5 to 6, Orient said in a separate March 3 statement.

The Shanghai-based firm is joining rivals Guosen Securities and Dongxing Securities in tapping the equity market for capital even as last year’s world-beating stock rally eases. The benchmark Shanghai Composite Index gained 2.2 per cent this year after surging 53 per cent in 2014.

State-owned Shenergy Group owns 38 per cent of Orient Securities, according to Orient’s IPO prospectus. Citigroup owns 33 per cent of Citi Orient Securities, which the US firm started with Orient Securities in 2012, according to the joint venture’s website. - BLOOMBERG

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