ICBC International picked as bookrunner for world's largest IPO

16:20, September 07, 2010      

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ICBC International, a wholly-owned investment banking subsidiary of the Industrial and Commercial Bank of China Limited (ICBC), was recently appointed as one of the bookrunners, which refers to the coordinator of the issuance of a financial instrument, for Brazil-based Petrobras' IPO, the world's largest equity financing project, Securities Daily reported on Sept. 7.

This is the first time that a Chinese investment bank will play a key role in a large share sales project in markets other than on the Chinese mainland and Hong Kong.

Petrobras plans to raise 55 to 65 billion U.S. dollars from the IPO. It has started the two-week road show and bookkeeping and filing work. It is expected to set the IPO price and the allocation of shares around Sept. 24 and complete the IPO after the settlement and delivery at the end of September.

An officer from ICBC said that under the requirements of the issuer Petrobras, the bank and its wholly-owned investment banking subsidiary ICBC International will fully mobilize its rich commercial and investment banking resources and provide quality investment banking services in order to help Petrobras accomplish the world's largest IPO in history.

According to an insider of the investment banking industry, joint bookrunners are hired usually when there is an international share issue, and their duties overlap with those of underwriters to a large extent. Both bookrunners and underwriters are responsible for contacting and inviting others to subscribe.

Sometimes even a single institution can act as a bookrunner and underwriter at the same time. However, the main difference is that underwriters are mainly responsible for selling shares, while bookrunners are mainly responsible for arranging subscriptions and allocating shares.

Guo Tianyong, director of the Research Center for the Banking Industry under the Central University of Finance and Economics, said that investment banks must constantly improve their capacities in marketing, utilizing resources and other aspects to achieve better and better development. The fact that ICBC International was selected as a bookrunner for the sale of the oil giant's shares shows that the capacity of certain domestic investment banks is internationally recognized.

Almost all global coordinators and joint bookrunners on the deal are world-renowned investment banks, including Morgan Stanley, HSBC, Goldman Sachs, and Bank of America-Merrill Lynch. Of them, only ICBC International is from Asia.

By People's Daily Online


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