LONDON/ZURICH, June 2 (Reuters) - China Pacific Insurance is pressing ahead with a London listing under a stock link scheme between Britain and China, it said on Tuesday, defying the market turmoil wrought by COVID-19.
The Chinese insurer, which is seeking to raise cash to support its overseas expansion, said it would issue 125.7 million units of global depositary receipts (GDR) in London with Swiss Re as its cornerstone investor.
Swiss Re will take a GDR allotment of up to 1.5% of China Pacific's total number of ordinary shares, with a lock-up period of three years.
The Shanghai-London Stock Connect scheme, which allows Chinese companies to add a secondary GDR listing in Britain, was first announced in 2018. It was meant to herald a flurry of Chinese listings in London but so far only one has materialised, the Huatai Securities brokerage deal last year.
SDIC, which was set to become the second Chinese company to make use of the scheme, called off its London listing in December, blaming market conditions.
The U-turn prompted speculation among bankers and analysts that China Pacific Insurance could follow suit due to the market turbulence caused by the coronavirus pandemic.
But China wants to revive the link scheme as a way to strengthen overseas ties and fund its post-lockdown recovery.
Beside China Pacific Insurance, energy firms SDIC Power and China Yangtze Power have also received the go-ahead from Beijing to list GDRs in London, sources have said.
If successful, these listings will give a boost to the London Stock Exchange where share sales have come to a halt due to the business paralysis caused by the spread of the virus.
European listings raised $918 million in the first quarter of 2020, according to Refinitiv data, more than three times the $301.2 million in the year earlier period. But activity halted abruptly in March and only partly resumed in May with coffee maker JDE Peet making its market debut in Amsterdam. (Reporting by Carolyn Cohn in London and Oliver Hirt in Zurich; Editing by Pamela Barbaglia and Pravin Char)