CITIC Capital among cornerstones for Harbin Bank IPO
CITIC Capital is one of seven cornerstone investors that will cover 43% of Harbin Bank’s Hong Kong IPO, which is expected to raise up to HK$10.1 billion ($1.3 billion), although subscriptions to the offering have reportedly been delayed due to concerns about investor sentiment.
Harbin Bank plans to sell just over 3 billion shares - not including the overallotment option - at a maximum price of HK$3.33 apiece. According to a regulatory filing, CITIC Capital has agreed to commit HK$1.16 billion to the offering. Assuming the IPO prices at the top end of the indicative range, the private equity firm would buy approximately 349.5 million shares, giving it a 3.06% stake in the bank.
The other cornerstone investors are Fubon Life Insurance, China Fortune Finance Holding, Wah Tao International Fund, Chongqing Tian Tai Real Estate Development, Boom Win Holdings and Introwell. They and CITIC will commit around HK$3.98 billion between them.
However, The Wall Street Journal reported that Harbin Bank has delayed taking orders amid growing concerns that news of China's escalating bad debt problem will spook investors. The bank was originally looking to go public on March 31 but may now wait up until June.
The Hang Seng Index is down 7.3% year-to-date, in part driven by China's macro situation, while the most recent lender to list in Hong Kong, Everbright Bank, has seen its shares fall 29% from the IPO price.
Harbin Bank primarily operates in the northeastern province of Heilongjiang, where it accounted for 11.5% of all banking assets as of December 2012. The lender has 304 outlets, comprising 15 branches and 245 sub-branches, and then 24 village and township banks with 20 sub-branches. It claims to have industry leading expertise in lending to small and micro enterprises.
The bank reported an unaudited net profit of RMB3.35 billion ($540.3 million) for 2013, up from RMB2.86 billion in 2012.
China International Capital Corp. (CICC), BOC International and ABC International are joint sponsors for the IPO, with Credit Suisse and Deutsche Bank joining them as joint global coordinators.
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