Agricultural Bank of China Ltd., the last of China's big four state-run lenders to be listed, has filed its listing application with the Hong Kong stock exchange and Chinese securities regulators Tuesday, officially kicking off a process for its US$20 billion to US$30 billion dual listing in Shanghai and Hong Kong, people familiar with the situation said.

Agricultural Bank's IPO could be the world's largest ever, exceeding Industrial & Commercial Bank of China Ltd.'s (IDCBY) US$22 billion stock offering in 2006 or Visa Inc.'s (V) $19.7 billion IPO in 2008, data provider Dealogic said.

The rural lender aims to list on both the Shanghai and Hong Kong bourses in July, another person said. Failing that, Agricultural Bank will try to list on both exchanges simultaneously in September, he added.

The person added that the Chinese authorities seem determined to push ahead with the listing of Agricultural Bank before they allow the country's major banks to recapitalize their balance sheets.

ICBC, Bank of China Ltd. (BACHY), China Construction Bank Ltd. (CICHY) and Bank of Communications Ltd. (BCMXY) have all announced plans to tap the bond and equities markets in Shanghai and Hong Kong for a total US$46.5 billion this year after last year's massive lending binge -the key platform of China's stimulus spending - depleted their capital buffers.

Agricultural Bank declined to confirm whether it has submitted its listing application, but said it would be seeking to float its shares in Shanghai and Hong Kong at an "appropriate time in the third quarter."

Another person familiar with the situation said the A- and H-share tranches could be of equal size, going against current practice where the A-share portion is larger. The money raised from the A-share tranches of the IPOs of both Metallurgical Corp. of China Ltd. (MLLUY, 1618.HK, 601618.SH) and China Railway Construction Corp. Ltd. (1186.HK) were each about 20% larger than the proceeds from the H-share tranche, while China South Locomotive & Rolling Stock Corp. Ltd.'s (1766.HK, 601766.SH) A-share proceeds were almost double, Dealogic said.

Metallurgical Corp of China raised a total of US$5.13 billion in its IPO in 2009; China Railway Construction raised US$5.71 billion in March 2008, and China South Locomotive raised US$1.57 billion in August 2008.

Agricultural Bank is in the process of meeting potential investors in its IPO and is targeting sovereign wealth funds, Hong Kong tycoons and peers in the banking and agricultural sector as cornerstone investors, the second person said, adding there is strong interest from the Middle East.

China's National Business Daily reported in April that Agricultural Bank had decided to introduce the nation's pension fund, which will invest at least CNY15 billion, to be the sole strategic investor ahead of its IPO. That's after another publication, the 21st Century Business Herald, said last July that French bank Credit Agricole SA (CRARY) and U.S. bank Wells Fargo & Co. (WFC) had dropped out of talks to be strategic investors in Agricultural Bank's IPO because both were severely hit by the global financial crisis.

Analysts said there is no lack of interest for Agricultural Bank's shares, especially from within China. China Life Insurance Co. (LFC), the country's largest life insurer by premiums, said publicly earlier this year it intends to subscribe to the rural bank's IPO.

While Agricultural Bank's listing had been widely expected for years, the bank surprised many when it began sending invitations to banks in April to underwrite its IPO.

Investors have been awaiting Agricultural Bank's IPO since ICBC's float, which came after the IPOs of China's two other Big Four lenders, Bank of China Ltd. and China Construction Bank Corp.

The global financial crisis pushed Agricultural Bank's IPO plans onto the back burner, but more recently China's drive to ensure that rural areas have proper access to finance seemed to further threaten Agricultural Bank's plans to list shares as it tried to shore up its roots as a rural lender.

Bankers said Agricultural Bank is trying to seize the liquidity left idle in the region after American International Group Inc. (AIG) canceled the planned US$10 billion to US$20 billion Hong Kong IPO of its Asian life insurance unit and announced in March it would sell it to Prudential PLC instead.

Agricultural Bank in April announced a group of 10 investment banks to underwrite the deal, among which China International Capital Corp. will handle both the A- and H-share portions.

Citic Securities Co. (600030.SH), Guotai Junan Securities Co. and China Galaxy Securities Co. are the other underwriters for its A-share offering in China, while Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM), Morgan Stanley (MS), Deutsche Bank AG (DB) and Macquarie Group Ltd. (MQBKY) are the other underwriters for its H-share offering in Hong Kong, according to the statement.

Agricultural Bank's wholly owned investment banking unit, ABC International Holdings Ltd., will also participate in underwriting work for the lender's Hong Kong IPO.Agricultural Bank's mega IPO will seal China's position as the top issuer of new shares this year, with US$24.8 billion raised in 146 new share offerings so far this year, ahead of Japan which has raised US$11.5 billion, mainly from one deal: the US$11 billion IPO of Daiichi Life Insurance Co. About 90% of the funds raised by Chinese companies this year have been via domestic offerings in China, while about 7% were raised in Hong Kong.

-By Amy Or and Wynne Wang, Dow Jones Newswires

(Victoria Ruan in Beijing contributed to the article.)
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