Caixin
Nov 07, 2019 04:10 AM
FINANCE

Financial Regulator Lists Anbang’s $980 Million Bank Stake for Sale

Anbang’s stake in Zheshang Bank is listed for nearly 6.9 billion yuan. Photo: VCG
Anbang’s stake in Zheshang Bank is listed for nearly 6.9 billion yuan. Photo: VCG

The Chinese government is continuing to dispose of former Anbang Insurance Group Co.’s assets, offering to sell its stake in a regional bank for 6.9 billion yuan ($980 million).

The China Banking and Insurance Regulatory Commission (CBIRC) working group in charge of the takeover of Anbang listed 1.347 billion shares of Zheshang Bank on the Shanghai United Assets and Equity Exchange. The listing will end Dec. 2.

The listing price is equivalent to 5.1 yuan per share, a 3% premium over the bank’s 4.94 yuan of net assets per share as of June 30.

Because the sale is a judicial disposal, the buyers need to pay a 600 million yuan deposit, according to the Shanghai United Assets and Equity Exchange.

The sale is taking place before Hong Kong-listed Zheshang’s plan for a mainland listing, which makes potential buyers subject to some restrictions, according to the exchange.

Potential buyers have to meet the requirements for a shareholder of a Chinese commercial bank. The buyers and related parties and concerted action parties cannot hold stakes in more than two commercial banks as a major shareholder or hold controlling stakes in more than one commercial bank. The buyers also cannot transfer the stakes within five years.

Zheshang Bank said Oct. 11 that it has approval for an A-share offering. Later last month, it set the offering price at 4.94 yuan a share, the same as its net assets per share. But it postponed the listing time originally scheduled for late October to Nov. 14, saying the offering price-to-earnings ratio is higher than the average P/E level for bank stocks.

Zheshang Bank was set up in 2004 with a mission to serve small and micro businesses in Zhejiang province, China’s hub of private manufacturers and traders. But the bank’s expansion in recent years has come under closer scrutiny by regulators.

The bank is 14.8% owned by the provincial government with the rest dispersed among a number of shareholders, including companies backed by private conglomerate Baoneng, Anbang and Wanxiang Group.

Anbang owns a 7.2% stake in the bank though Traveller Automobile Group, an auto distribution and maintenance company in which Anbang founder and former Chairman Wu Xiaohui invested. Traveller Automobile is listed as the second-largest shareholder of Zheshang Bank.

Many of Anbang’s assets have been disposed of since the country’s bank and insurance regulator took over the acquisitive company in February 2018 and Wu Xiaohui was sentenced to 18 years in prison for fundraising fraud and embezzlement.

Over the past two months, Dajia Insurance Group, the company created to take over parts of Anbang’s business, sold off Anbang’s entire stake in Shanghai- and Hong Kong-listed China Merchants Bank Co. Ltd.

Last year, Anbang tried to sell its 35% stake in Chengdu Rural Commercial Bank for 16.8 billion yuan but failed to reach a deal.

Anbang also needs to dispose of its 17.84% stake in China Minsheng Banking Corp Ltd. worth 47.1 billion yuan.

Contact reporter Denise Jia (huijuanjia@caixin.com)

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