Harbin Bank postpones planned US$1billion IPO: sources

PUBLISHED : Tuesday, 18 March, 2014, 3:28pm
UPDATED : Tuesday, 18 March, 2014, 3:28pm

Harbin Bank has postponed its planned US$1 billion offering, even though the lender had secured more than half of its share sale from cornerstone investors, according to people familiar with the deal.

The lender was the latest casualty in the lukewarm market after China’s largest small credit lender Hanhua Financial Holding and mainland luxury auto dealer Sunfoda said they would delay their offerings due to adverse market conditions.

The northeast China bank had originally planned to sell about three billion shares on Tuesday and aimed for a listing at the end of March.

The benchmark Hang Seng Index has dropped 7.5 per cent so far this year, partly due to the downbeat performance of mainland banks and energy stocks.

Before kicking off the official roadshow, Harbin Bank had received a combined US$510 million from seven cornerstone investors, who accepted the terms of holding their shares and not selling them for a set period of time in exchange for an agreed allotment of shares.

The mainland’s private equity investor Citic Capital, partly owned by sovereign wealth fund China Investment Corp, is investing US$150 million in the share offer.

Meanwhile, Fubon Life Insurance, a unit of Fubon Financial, one of Taiwan’s largest financial conglomerates, will take US$290 million worth of shares.

Bankers said listed banking stocks on the mainland were trading at below book value, putting upcoming listings by industry players at a disadvantage as they are required to price their shares at a minimum of book value.

Sentiment towards mainland banking stocks has been fairly pessimistic since last year due to worries over asset quality amid a slowing economy. Shares in China Everbright Bank, the largest IPO last year, decreased by 29 per cent since the bank’s December listing, reflecting investors’ ongoing concerns.