Standard Chartered PLC and China Life Insurance /zigman2/quotes/202359856/delayed HK:2628 +0.91% Co. plan to be cornerstone investors for Agricultural Bank of China /zigman2/quotes/200125072/delayed UK:STAN +0.21% Ltd.'s giant initial public offering, according to separate people familiar with the matter, as the closely watched fundraising effort moves forward.
Separately, Dutch financial services company Rabobank said it will be a cornerstone investor in the bank, one of China's largest.
Standard Chartered, which is based in London but has a significant Asian presence, agreed to be a cornerstone investor in the Hong Kong portion of the IPO, according to two people familiar with the situation. Exactly how much Standard Chartered intends to invest in the offering hasn't yet been determined, though the amount could be as much as $500 million, one of the people indicated.
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A spokeswoman for Standard Chartered declined to comment.
The AgBank offering was expected to raise between $20 billion and $30 billion on the Hong Kong and Shanghai stock exchanges, making it potentially the biggest IPO ever. Volatility in global capital markets, however, is now expected to push the total amount sought down somewhat. The shares are expected to price around July 6 or 7 and begin trading by mid-July.
Earlier Thursday, Standard Chartered said it signed a memorandum of understanding with AgBank to collaborate on retail and wholesale banking products and services both within China and internationally, with Hong Kong likely a pilot region for the cooperation.
China Life also plans to be a cornerstone investor, though the two sides have yet to sign a deal, an executive at the insurer familiar with the situation said Thursday. The executive expects the IPO pricing to be "favorable" amid still-weak capital markets.
The executive didn't specify whether China Life is interested in buying AgBank's yuan-denominated Class A shares or Hong Kong-listed Class H shares in the IPO.
China Life Chairman Yang Chao has repeatedly said in the past two years the company is interested in taking a stake in AgBank.
Rabobank said it will likely buy a stake of roughly 0.5% in AgBank.
"We're considering buying shares for up to $200 million, which will give us a stake of around 0.5%," Chairman Piet Moerland said on the sidelines of Rabobank's annual general meeting in Utrecht on Thursday. He didn't say whether the investment would be in the Hong Kong or Shanghai tranche of the offering.
The investment is aimed at forming the basis of Rabobank's strategic partnership with AgBank, announced two weeks ago. The areas of cooperation are expected to include wholesale banking, rural finance and asset management.
"Such a stake isn't big and we're not looking to become a major investor. The stake is primarily meant to cement our partnership," Mr. Moerland said.
"AgBank asked us to buy a stake as it wants foreign parties to become cornerstone investors as well," he added.
Other parties that have agreed in principle to be cornerstone investors for the Hong Kong portion of AgBank's offering include Middle Eastern sovereign-wealth funds Qatar Investment Authority and Kuwait Investment Authority; Singapore state investment company Temasek Holdings Pte. Ltd.; and Hong Kong billionaire Li Ka-shing , other people familiar with the situation have said.
Peter Stein, Victoria Ruan and Maarten van Tartwijk
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