China Cinda gains 26% on Hong Kong trading debut

The PE-backed firm, originally set up to absorb non-performing loans (NPLs) from China's Big Four state-owned banks, earlier priced its offering at the top end of the indicative range to raise $2.5 billion - Asia's second-largest IPO of the year. The final total is expected to reach nearly $2.9 billion once the overallotment option kicks in due to the retail tranche of the offering being substantially oversubscribed.

Cinda shares rose by as much 34% before settling back to HK$4.50, valuing the entire company at around $21 billion.

A total of 5.3 billion shares were sold through the IPO, with 10 cornerstone investors covering $1.1 billion of the offering.

These investors included Norges Bank Investment Management, Oaktree Capital Management, Och-Ziff Capital Management, Farallon Capital Management, Rongtong Capital Management, Ping An Insurance's asset management arm, Shandong State-owned Assets Investment Holdings, and a unit of power firm Guangdong Yudean Group.

Separately, Oaktree has entered into a joint venture with Cinda that will see the two groups invest in distressed assets in China.

Cinda has several foreign strategic investors, following last year's $1.7 billion investment in the company by CITIC Capital, UBS and Standard Chartered alongside the National Council for Social Security Fund (NSSF). Boyu Capital is also understood to have invested in Cinda at some point.

Cinda was one of four asset management companies (AMCs) established in 1999 to absorb the banks' bad debts. It was tasked with managing NPLs at China Construction Bank specifically, which needed to be restructured and recapitalized ahead of its IPO.

Cinda is understood to have since accumulated a sizeable real estate portfolio by foreclosing on bad debts, as well as taking stakes in a wide range of companies through debt-for-equity swaps. It is headquartered in Beijing and has a network of 31 branches, nine first-tier subsidiaries and branches of the first-tier subsidiaries, with more than 18,000 employees.

The company announced that profit attributable to shareholders reached RMB4.06 billion ($667 million) for the six months ended June 2013, up 36% year-on-year. Total assets stood at RMB283.6 billion, an increase of 11% on December of last year.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Exits
• Financials
• IPO
• China
• Financial Services
• Oaktree Capital