SHANGHAI (Reuters) — China Reinsurance, the country’s biggest reinsurer, plans to raise as much as $2.6 billion in a dual Shanghai and Hong Kong IPO in September to bankroll a rapid expansion, two sources close to the deal told Reuters yesterday.The plan follows a decision by the Chinese government late last year to inject $4 billion into the state-owned firm — which controls over 90 percent of a burgeoning domestic reinsurance market — to boost its capital.

The firm now aims to raise 10 billion yuan to 20 billion yuan ($1.3-$2.6 billion) through the initial public offering, the sources said.

“The company definitely wants capital, as much as they can raise on the markets,” said an insurance source in Shanghai familiar with the deal.

“But it’s not China Life or Ping An,” the source said. “Reinsurance is definitely more difficult, and more complicated, to convince and explain to investors.”

If successful, the firm — which insures other insurers — would become the country’s first reinsurer to go public. Core sector players such as China Life and Ping An Insurance have already floated shares at home and abroad.

After its IPO, the Beijing-based insurer would hold assets of at least 70 billion yuan, the sources said. Its listing plan has won regulators’ support, though the company has not yet formally applied to Beijing for approval.

The sources added that it had not finalised its IPO size, which would depend on the state of markets.

China Reinsurance (Group) Co. hired the country’s biggest brokerage, CITIC Securities, to manage its proposed local currency A-share issue in Shanghai. China International Capital Corp., 34.3 percent-owned by Morgan Stanley (MS.N), and other global investment banks will help the insurer with its Hong Kong IPO, the sources said.

The firm also has hired PricewaterhouseCoopers PWC.UL to be its external IPO auditor, the sources said, adding that an auditing report could be finished this month. Officials at China Reinsurance declined comment.

Last week, China Insurance Regulatory Commission Vice Chairman Zhou Yanli said in Beijing the watchdog expected more insurers to list this year, a positive trend that will strengthen corporate governance and operations. He did not mention names.

China Reinsurance, whose clients include PICC Property & Casualty (2328.HK), the country’s biggest non-life insurer, is the country’s oldest reinsurance services provider, founded around the time the Communist Party seized control in 1949.

It is now owned by the Ministry of Finance but the company plans to secure a strategic partner by selling it new shares through the IPO, though the ministry will remain in control, the sources said, declining to elaborate. China Reinsurance’s major rivals include Munich Re and Swiss Re, the world’s two biggest players. The sources declined to comment whether the Chinese reinsurer might get a foreign partner to boost its global business.

But they noted that part of the reason for listing was that the government wanted to strengthen the firm’s competitiveness globally.

“China is now a major economic power in the world and Beijing has lots of big projects to implement in the next few years, like space exploration,” said another financial source.

“So, the government absolutely needs a strong reinsurance service provider.”