Kuwaiti company to invest $720m in China bank's IPO

Beijing, Dubai: Kuwait will be among the top investors in Industrial and Commercial Bank of China, as the oil-rich state seeks closer ties to the world's fastest growing major economy.

State-owned Kuwait Investment Authority will buy ICBC shares worth $720 million, according to ICBC's prospectus, making it the largest single subscriber in what is expected to be the world's biggest initial public offering (IPO).

"This participation demonstrates Kuwait's deepening economic ties with China and showcases the long-term strategic value of KIA as a core investor," KIA Managing Director Bader Al Saad said in a statement faxed to Reuters.

"This participation also marks the beginning of KIA's long-term strategic investment plan in China, which the KIA hopes to extend to many other sectors."

ICBC, the country's biggest bank with assets of $890 billion, said on Friday it would sell as many as 55.65 billion shares in a Hong Kong and Shanghai IPO.

The bank hopes to raise between $18 billion and $21 billion and to list on October 27, in a flotation that could surpass Japan's NTT Mobile Communications, which raised $18.4 billion in 1998 in the world's largest IPO to date.

A unit of the Government of Singapore Investment Corp (GIC) will buy $360 million in shares and Qatar Investment Authority will buy $206 million, according to ICBC's prospectus released late on Friday.

Gulf Arab investors are scouring the globe for assets to invest record revenues from oil exports. Many are looking to Asia, partly due to fears that their assets in the West could be targeted over security concerns.

Other large subscribers to the IPO include insurer China Life Group and its listed unit China Life Insurance Co. Ltd, which will buy $568 million and $258 million of shares respectively.

The IPO has garnered interest from some of Hong Kong's wealthiest property developers. Chow Tai Fook Nominee Ltd, owned by property and casino tycoon Cheng Yu-Tung, will take $206 million of shares. A company controlled by developer Lee Shau Kee will also buy $206 million of shares, while Cheung Kong Holdings and Hutchison Whampoa will each buy $103.2 million in shares.

Property developer Kuok Group and subsidiaries will together take $412 million of shares. Companies controlled by Citic Pacific and its chairman Yung Chi Kin will together buy $206 million of shares.