Guangdong Bank plans raising $2bln through share issue

Lender joins other China rivals’ share offerings by selling 3.4bln shares to restore capital before IPO.

Guangdong Development Bank Co., part-owned by Citigroup Inc., plans to raise as much as 15 billion yuan ($2.2 billion) from a private placement to replenish capital ahead of a planned initial public offering.

The bank may sell 3.4 billion shares at 4.38 yuan each ($.64) to existing shareholders in the first half of this year, the Guangzhou-based company said in an e-mailed statement today. Guangdong Development Bank plans to raise more capital from convertible bond sales around the end of 2010, it said.

Guangdong Development Bank joins bigger rivals including Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. in bolstering capital after the nation’s 9.6 trillion yuan ($1.41 trillion) credit binge last year weakened their finances and the regulator imposed tougher requirements as buffers.

Citigroup in December 2006 won control of Guangdong Development Bank with six seats on the board after leading a group in buying an 86 percent stake for $3.1 billion. Under President Michael Zink, Guangdong Development Bank overhauled its management, accelerated branch expansion and doubled assets to 666.5 billion yuan over the past three years.

View the full story in News Release Reuters.