Chinese ag bank to sell $6.5 billion preferred stock

Agricultural Bank of China Ltd. may raise as much as 40 billion yuan ($6.5 billion) from the sale of preferred shares this year as part of its plan to raise a total of 80 billion yuan.

The Beijing-based lender has applied to the China Securities Regulatory Commission to sell 400 million preferred shares this year after getting an approval from the China Banking Regulatory Commission yesterday, it said in a statement to the Shanghai Stock Exchange.

The share sales will bolster Agricultural Bank’s capital position and allow it to conform to stricter requirements introduced by the government in January 2013. China’s four biggest banks will face a capital shortfall of $87 billion under the new rules by 2019, Mizuho Securities Asia Ltd. estimated in a March report.

The bank first announced its plan for the sale in May.

 

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