PBOC to become bank of Jinzhou biggest shareholder in latest bailout
March 13, 2020
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.