China’s A-Share Major-Shareholder Private Placements Drop to Two New Deals in June

After multiple listed companies revised the pricing benchmark date for private placements in early June, policy expectations quickly fed through to China’s primary market, according to 36Kr. Data through June 29 show that, excluding M&A-related placements, only two new private placement projects in June raised funds from controlling shareholders or their affiliates, and both used competitive pricing. By contrast, January to April averaged about seven new major-shareholder private placements per month, all using fixed-price issuance. As single controlling shareholders fully subscribing to placements cooled, more listed companies sought to bring in other institutional investors. Since June, four new private placement proposals were added, with issuance targets commonly described as “no more than 35 institutional investors, including the controlling shareholder.” Market participants said the concentrated adjustments to pricing benchmark dates for fixed-price placements fully subscribed by controlling shareholders or affiliates could help curb arbitrage incentives.