The state-backed bailout of troubled Bank of Jinzhou has taken another step forward with two government-owned entities, one controlled by the central bank, agreeing to inject nearly RMB 12.1 billion ($1.7 billion) into the Hong Kong-listed company through private placements that will make them the lender’s biggest shareholders, reported Caixin.
Bank of Jinzhou is planning to sell new equity amounting to 44.3% of its enlarged share capital to Beijing Chengfang Huida Enterprise Management Co. Ltd., a special-purpose vehicle ultimately controlled by the People’s Bank of China (PBOC), and Liaoning Financial Holding Group Co. Ltd., a company set up by the finance department of the government of Liaoning province, where the bank is based.
The proceeds of the placements, which were announced in a filing to the Hong Kong Stock Exchange on Tuesday, will be used to replenish the bank’s core Tier-1 capital, the highest-quality capital a bank has to absorb losses.
The cash infusion into Bank of Jinzhou, which reported a RMB 4.5 billion loss in 2018 and has yet to announce its 2019 results, comes eight months after the bailout of the regional lender began.
You must log in to post a comment.