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21 January 2008 By Una Galani Follow @ugalani

Western markets are faltering, but China s secondlargest insurer plans to raise a $20bn warchest. The company s shareholders may not be happy, but there is an opportunity. Cashrich companies from the East can swoop like sovereign funds on weakened Western targets.

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Ping An, China's second largest life insurer, announced on Monday details of its plans to sell RMB147bn ($20bn) of new Ashares and convertible bonds, to boost its warchest for acquisitions. The move would be the biggest equity refinancing by a Chinese company.

The insurer will issue 1.2bn new Ashares, equal to 14% of the company's enlarged capital to public and institutional investors. The price will be no less than the stock's average market price over the 20 days before the prospectus is released, or no less than the average price on the previous day.

Based on Ping An's Friday closing, it could raise up to RMB106bn ($14.7bn). In addition, it plans to sell up to RMB41.2bn ($5.7bn) worth of convertible bonds.

In November, Ping An bought a 4.2% stake for $2.7bn in BelgoDutch bank Fortis.

Ping An AShares traded in Shanghai fell by the daily 10% limit to RMB88.30 on the news.

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