China Minsheng Bank took a 2.65% stake in debt-ridden Kangde Xin Composite Material Group through an investment vehicle in hopes of recouping some losses from its bond holdings in the serial defaulter, reported Caixin.
Shenzhen-listed Kangde Xin said in a Tuesday filing that a Minsheng Bank-backed investment firm — Jinsheng Weihai Equity Investment Partnership — purchased 93.85 million of its shares in a recent legal auction, becoming the company’s third-largest shareholder. Kangde Xin remains controlled by Kangde Group with 20.75%.
The Jiangsu province-based laminating film manufacturer has been mired in debt woes after it missed payments on billions of RMB of bonds since the beginning of the year. Shocking the market with ample cash holding shown on its books, the company was later accused by regulators of faking documents to inflate its overseas profits by RMB 11.9 billion ($1.7 billion) for the four years through 2018.
The collapse of Kangde Xin left bondholders in the lurch. Based on market records, Caixin calculated that Kangde Xin raised more than RMB 8.8 billion since 2014 through bond sales and private placements.