SDP on capital hunt

Shenzhen Development Bank plans to raise capital through a private placement of shares and the issuance of debt, Frank Newman, the bank's chairman, told the Wall Street Journal. Shenzhen Development Bank, the only Chinese bank run by foreign investors, is controlled by US private-equity firm Newbridge Capital, which bought a 17.89% stake in late 2004. Holders of the bank's tradable shares are set to vote on a plan to convert its nontradable shares on July 17, Newman said. If the plan passes, the bank will move to boost its capital through a private placement with domestic or international investors, followed by the issue of US$375 million in subordinate debt. The capital-strapped bank wants to raise its capital-adequacy ratio from 3.83% (as at the end of March) closer to the 8% regulatory requirement.