Jul 30, 2019 (China Knowledge) - Three state-owned financial institutions said last Sunday that they would take stakes in Bank of Jinzhou. Industrial and Commercial Bank of China (ICBC) and two of China's four largest distressed debt managers will take at least 17.3% in the troubled lender.
ICBC Financial Asset Investment Co signed an equity transfer agreement to invest up to RMB 3 billion (USD 436 million) for a10.82% stake of Bank of Jinzhou. China Cinda Asset Management said that it would invest in a 6.49% stake and China Great Wall will also take up a stake. Both the two distressed debt managers did not give the value of the deal.
Bank of Jinzhou has suspended trading in its shares since April and lost its auditor. The trouble bank is in talks with multiple parties for possible investments. Regulators also look to diversify their approach in supporting highly indebted smaller banks like Bank of Jinzhou and to contain financial risks.
ICBC says that such investment is to serve country's supply-side reform in the financial sector and enhance the bank’s capability to serve the real economy. The deal will be conducted with its own funds, ICBC added. Instead of a state takeover, the government introduces state-owned strategic investors for Bank of Jinzhou, injecting confidence into the market, said Dai Zhifeng, analyst with Zhongtai Securities.
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