[Shenzhen, China] 18:00 June 29, 2009
Shenzhen Development Bank (“SDB” or “the Bank”, SZSE 000001) today filed with the Shenzhen Stock Exchange announcements of the voting results on the Non Public Offering (“NPO”) plan at the 2nd 2009 Extraordinary Shareholder Meeting: the Shareholders’ Meeting passed the NPO plan of issuing new shares of no less than 370 million and up to 585 million at 18.26 Yuan per share to Ping An Life Insurance Company of China, Ltd. (“PA Life”), with high approval rate. The plan will be submitted to regulatory authorities for approval as soon as possible.
At the completion of this capital injection, after regulatory approval, the Bank will improve its core capital by between 6.7 and 10.7 billion Yuan. Also, Ping An Group (“PAG”) announced earlier this month that it had signed the Share Purchase Agreement with Newbridge Asia AIV III, L.P. (“Newbridge”) to buy all the SDB shares from Newbridge. The full text of the announcements is available at www.cninfo.com.cn.
This press release, which is posted at www.sdb.com.cn, summarizes key aspects of the voting results, along with management comments.
Today, the Shareholders’ Meeting of SDB approved the NPO plan of issuing new shares of no less than 370 million and up to 585 million to PA Life with high approval rate, far beyond the two thirds “Yes” votes out of voting shares as required. As the current largest shareholder Newbridge, PAG, and PA Life constitute related legal persons to SDB on this NPO plan, they abstained from voting on the related proposals at the meeting.
The voting shares at the Shareholders’ Meeting represented about 1.6 billion shares, accounting for 66% of 2.44 billion shares that are not related with the proposal. The Meeting reviewed five proposals, all voted on and passed by the shareholders separately. The 11 sub-proposals of the first proposal--Proposal of Non-Public Offering of Shenzhen Development Bank, including sub proposals on issuance price, amount, and measures, were all voted and passed separately. The voting result is that, each of the 11 sub proposals had received higher than 93.8% Yes votes. Among the other four proposals, the proposal regarding usage of fund raised last time was approved by over 99% Yes votes. The usage feasibility report of the fund to be raised by NPO, the qualification of the issuer for NPO, and authorization to the board, were also all passed, each with more than 93.6% Yes votes. “No” votes took a very small portion for each proposal, accounting for only about 0.2%.
SDB will submit relevant applications for the NPO plan to applicable regulators including CBRC and CSRC after this approval by the Shareholders’ Meeting. Upon regulatory approval on NPO plan and required approvals for Share Purchase Agreement signed by PAG and Newbridge, NPO will be completed, but the specific time is subject to the regulatory approval process.
The addition of core capital from the NPO will be substantial and is expected to enhance the Core Capital Adequacy Ratio (“CCAR”) and Capital Adequacy Ratio (“CAR”) to above 7% and 11% respectively for SDB. Besides the NPO, as announced before, the Bank plans to continue to build its tier 2 capital as appropriate by which the Bank can see further CAR enhancement. As the new strategic investor of SDB, PA will inject substantial capital to raise the capital base significantly, and support the bank to achieve more success in the future. Furthermore, the potential cooperation initiatives with PAG can bring significant business opportunities to the bank.
The Bank believes that the strikingly high voting participation and approval rate fully demonstrated other investors’ confidence in the long-term and continuous healthy growth of SDB, and also means high recognition to PAG as the new investor.
With the efforts of the senior management and employees, the Bank advanced well in business development, profit generation, customer service, NPL ratio, credit management, internal control, and financial management since 2005. In April 2009, SDB reported 12% Net Profit growth YOY, the best performance among the 14 listed commercial banks.
After the deal that introduces PAG to SDB, the two parties are expected to provide more diversified products and services to the customers of each other, explore the width and depth of cross-selling, share advantages in operation system and management resources, and provide convenient services to customers leveraging more powerful network, thus promote customer base and service range for both to benefit from the synergy to improve shareholders’ value jointly. The two parties plan to set a co-working group to plan cooperation matters once certain progress has been made in regulatory approval, to enable various initiatives to be put into action soon after completion of the issuance, with proper procedures. All such initiatives will be arranged in full compliance with applicable corporate governance standards.
Shenzhen Development Bank, the first joint-stock owned company to list on the Shenzhen Stock Exchange (SZSE 000001), is a national Bank headquartered in Shenzhen, with RMB 521.9 billion Yuan in assets. SDB provides a broad range of services to commercial, retail, and government customers, through 286 branches and sub-branches in 19 major cities across China. 16.76% of the Bank’s shares are owned by Newbridge Asia AIV III, L.P.
Selected balance sheet items at 2009-03-31
- Total Deposits: ￥400.7 billion
- Total Lending: ￥319.4 billion
- Total Assets: ￥521.9 billion
Ping An is the first integrated financial services conglomerate in China that blends its core insurance operations into securities brokerage, trust and investment, commercial banking, asset management and corporate pension business to create a highly efficient and diversified business profile. It was established in 1988 and headquartered in Shenzhen, Guangdong Province, China. In June 2004 and March 2007, It has been listing its H-Shares on the Hong Kong Stock Exchange and Shanghai Stock Exchange under the name "Ping An". As at 31st December 2008, under International Financial Reporting Standards (IFRS), consolidated total assets and total equity of Ping An were RMB 754.7 bn and RMB 85.7bn respectively. It has about 356,000 life insurance sales agents, over 83,000 full-time employees. In June 2009, Ping An listed among 2009 “Global 500 Largest Companies” released by Financial Times in UK the second time, it ranked No. 87 globally with USD 42662.9bn market capitalization, No. 17 among global financial groups, and No. 3 among insurance group. Before that, with solid business behavior, excellent operation mgmt and comprehensive financial advantage, Ping An was named “Global 2000 Largest Listed Companies” by Forbes and “the World 500 Largest Companies” by Fortune many times. It holds the title of No. 1 non state-owned enterprise in China many times.