Cash injection for Everbright
17 August 2007
China Everbright Bank will receive a US$2.6 billion cash injection from the government ahead of the bank's initial public offering expected in the first half of next year, the Financial Times reported. Everbright is also likely to bring on board at least one foreign strategic investor, with Standard Chartered widely believed to be considering a stake. The bailout is part of the final round of recapitalization for China's banking system, which was left close to insolvency after years of state-directed lending. Agricultural Bank of China (ABC) could receive a cash injection of US$40 billion while China Development Bank (CDB), which recently spent US$3 billion on a 3% stake in Barclays Bank, gets at least US$20 billion. Neither ABC nor CDB is expected to allow foreign strategic investors.
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