New | Link to Hanergy delays IPO of China’s Bank of Jinzhou in Hong Kong

Liaoning-based Bank of Jinzhou has been forced to delay its US$600 million Hong Kong IPO after the city’s stock exchange raised questions over its exposure to the parent of Hanergy Thin Film Power.

Hong Kong’s Securities & Futures Commission is investigating Hanergy Thin Film Power, a Chinese solar energy firm whose shares crashed last month.

Bank of Jinzhou, a city commercial bank in Liaoning Province, had intended to conduct the IPO this month. However, people close to the plan say that timeline is now unworkable after the Stock Exchange of Hong Kong asked for more information about an 8 billion renmimbi (US$1.29 billion) credit line that Bank of Jinzhou granted to Hanergy Group, the parent of Hanergy Thin Film Power.

The documentation for the IPO is based on the bank’s financial results from the end of December. Past June, those results would no longer meet Hong Kong’s listing requirements.

"Hanergy is currently facing a probe by the SFC and it’s not difficult to imagine how careful the stock exchange is in handling the lender’s listing application. They are asking the lender to provide every single detail of the credit line and whether it has provided other loans to Hanergy," said one of the sources.

"We expect the stock exchange will only schedule a listing hearing for Bank of Jinzhou when there is more clarity on the Hanergy situation. The regulator definitely doesn’t want to take the blame of letting the lender go public, if Hanergy fails to repay the loan and hurts the lender’s profit," said another source.