Chinese Realty Giant Evergrande to Splurge USD1.9 Billion to Raise Stake in Shengjing Bank
Liao Shumin
DATE:  Jun 22 2019
/ SOURCE:  yicai
Chinese Realty Giant Evergrande to Splurge USD1.9 Billion to Raise Stake in Shengjing Bank Chinese Realty Giant Evergrande to Splurge USD1.9 Billion to Raise Stake in Shengjing Bank

(Yicai Global) June 21 -- Chinese real estate behemoth Evergrande Group is optimistic about the banking sector and will invest CNY13.2 billion (USD1.9 billion) in Shengjing Bank to raise its holdings in the lender from 17.28 percent to 36.4 percent.

Shengjing's shares [HKG:2066] closed up 11.87 percent at HKD5.56 (US0.71 cents) after the property developer announced this capital infusion today.

Evergrande is confident about Shengjing Bank's future growth, the Shenzhen-based company said in the announcement, citing it as the reason for the hike in its shareholding.

In view of the bank's need to raise capital adequacy, Evergrande is willing to increase its holdings in Shengjing as its first majority shareholder, it added.

The bank will receive CNY18 billion from its shareholders Evergrande, Zhengbo Holdings and Future Capital via private placements, which await approval from its shareholders and regulators, the Shenyang, Liaoning province-headquartered lender said today.

Proceeds will go to supplement its capital, the lender noted. The increase will lift the lender's core tier one capital adequacy ratio to 12 percent from 8.52 percent and its capital adequacy ratio to 15 percent from 11.86 percent.

Evergrande will buy the bank's stocks for CNY6 (USD0.87 cents) per share, which is quite a premium on their price on the Hong Kong bourse.

Editor: Ben Armour

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Keywords:   Evergrande,Shengjing Bank