CITIC Capital in $1.6bn Cinda deal
CITIC Capital, alongside Standard Chartered and UBS, has reportedly been approved to be a strategic investor in China Cinda Asset Management Co., which will also receive a capital injection from China’s national pension fund. The total investment will exceed RMB10 billion ($1.6 billion).
The National Social Security Fund (NSSF) will hold an 8% stake in Cinda, while the other three investors will jointly hold another 8% following the completion of the deal. The move is seen as related to Cinda's progress toward a public listing in both Shanghai and Hong Kong, a source told Caixin.
"Cinda's capital injection won approval from the State Council and the transaction is expected to be completed soon," said the source.
Founded in 1999 by the Ministry of Finance, Cinda is one of four state-owned asset management companies tasked with clearing distressed debt from China's state-own banks and brokerages. This includes the bad loans of China Construction Bank, which is now the nation's second-largest lender.
In 2010, a RMB15 billion injection from the Ministry of Finance marked the start of Cinda's transformation into a market-oriented financial institution.
The other three state-owned debt-clearing agencies - Huarong Asset Management Corp., China Orient Asset Management Corp. and China Great Wall Asset Management Corp - are also on their way to becoming market-oriented. Huarong, for example, will reportedly launch an initial public offering sometime this year.
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