HONG KONG â€" China Cinda Asset Management, one of the biggest ‘‘bad banks’’ set up by the Chinese government to absorb deadbeat loans from the rest of the financial system, raised about $2.5 billion in a Hong Kong share sale on Thursday, according to a person familiar with the deal.
Cinda’s initial public offering is the city’s biggest so far this year. The deal priced at the top of the marketed range after receiving strong demand from both big overseas funds and individual local investors, the person said, declining to be named because the information is not yet public.
Cinda, a government agency created in 1999 to take on bad debts from state lenders and restructure deadbeat loans, sold 5.3 billion shares priced at 3.58 Hong Kong dollars apiece, raising a total of 19 billion dollars, or $2.5 billion. That compares with the marketed range of 3 dollars to 3.58 dollars per share.
So-called cornerstone investors had committed to invest $1.1 billion in the offering, accounting for 44 percent of the shares being sold and boosting the I.P.O.’s chances of success. Those investors, who agreed to hold their shares for six months, included China Life Insurance (Group) Company, the American hedge fund Och-Ziff Capital Management and the Norwegian state investor Norges Bank, among others.
In preparation for its I.P.O., Cinda in April 2012 had also sold a 16.5 percent stake to four strategic investors: China’s National Social Security Fund, UBS, Citic Capital and Standard Chartered. Those four investors acquired 5 billion shares at 2.08 renminbi, or $0.34, per share â€" meaning that as of Thursday they were sitting on combined paper profits of about $600 million.
No fewer than 18 underwriters took part in Cinda’s I.P.O., lead by Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs and Morgan Stanley.
