BOC said to hire Goldman for IPO
(Xinhua)
Updated: 2005-08-30 16:17

Goldman Sachs Group Inc, the world's leading stock underwriter, had been hired to prepare an initial public offering (IPO) for Bank of China (BOC), the nation's second-biggest lender, sources close to the bank said.

Xiao Gang, chairman of BOC, last week met with a group of Goldman bankers led by Mark Machin, co-head of investment banking in Asia outside Japan. Goldman will work with PricewaterhouseCoopers LLP, BOC's auditor, to prepare for an IPO to raise at least US$5 billion as early as the first quarter of 2006, they said.

BOC two weeks ago agreed to sell a 10 percent stake to Royal Bank of Scotland Plc, Merrill Lynch & Co and a foundation set up by Hong Kong billionaire Li Ka-shing for US$3.1 billion.

US and European banks spent US$8 billion buying stakes in China's lenders during the past year in an economy that grew 9.5 percent in 2004, more than twice the pace of the United States.

"Goldman's track record in helping Chinese banks list overseas has given them an advantage," said Andrew Chan, an analyst at Pacific Sun Investment Management in Hong Kong. "Public share sales are a very important stage of reform for the State-owned banks and BOC has to ensure it has an experienced team of bankers to handle the sale."

Goldman arranged Bank of Communications Ltd's US$2.2 billion IPO in June. Shares of China's fifth-biggest lender rose 33 percent since the sale.

UBS AG, the second-ranked global stock underwriter this year, also held meetings with Xiao and will probably work on the IPO with Goldman, people familiar with the plan said.

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