China's Minsheng Banking Corp will launch its US$800 million initial public offering (IPO) in Hong Kong next week, sources close to the deal said yesterday.

The mainland's first private lender, which plans to offer 20 per cent of its enlarged share capital, will begin a formal management road show in the week of June 20, and aims for a trading debut in early July, the sources said.

Minsheng is competing for investors' attention against a bigger rival Bank of Communications (BoCom), which had started marketing a US$1.5-US$2.0 billion offering last week.

It also faces a crowded Hong Kong IPO market, where together with top mainland coal miner Shenhua Energy, BoCom and COSCO Holdings, it aims to raise over US$8 billion in about a month.

Minsheng's Shanghai-listed shares, denominated in Chinese yuan, closed 4.86 per cent higher at 4.53 yuan (US$0.547) on Thursday.

Fund managers said the Beijing-based Minsheng, which uncovered several problem loans in recent years, should offer its shares at a discount to BoCom, which is offering its shares at about 1.5 to 1.8 times 2005 book value.

Minsheng's employees had forged a signature on a shareholders' meeting document to speed up a 4.13-billion-yuan (US$500 million) domestic IPO in 2000.

Singapore state investment agency Temasek Holdings bought 4.55 per cent in Minsheng, after US fund Newbridge Capital called off a deal to buy 4.82 per cent of the bank last year.

Goldman Sachs, Citigroup unit Citibank and Deutsche Bank AG had been selected as Minsheng's underwriters.

Beijing is pushing its big banks to go public as the country cleans up its banking system, which is burdened with more than US$200 billion in sour debts and is preparing it for foreign competition.

The mainland will open the sector to foreign competition in late 2006 under World Trade Organization commitments.

China Construction Bank, the mainland's third-largest, plans to raise over US$5 billion in a November listing while Bank of China, the second-largest lender, eyes an IPO next year and top lender Industrial & Commercial Bank of China may seek a listing as early as 2007.

(China Daily June 4, 2005)