Chinese firm Zhongjing Xinhua Property Management is reportedly divesting its stake in Huishang Bank for CNY16bn ($2.5bn).
Shenzhen Amer International Group is the buyer of the stake, Caixin Global reported.
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The property manager along with its affiliates are selling 1.977 billion shares of the lender, which amounts to 14.23% of its stake.
This awaits clearance of the board of Huishang Bank and regulatory authorities.
This is Zhongjing Xinhua’s second attempt to sell the stake after a deal with Ningbo Shanshan in 2019 collapsed, added the report.
Notably, Huishang Bank has been one of the largest lenders of Baoshang Bank’s interbank debts.
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By GlobalDataHuishang Bank bought Baoshang’s Beijing, Shenzhen, Chengdu, and Ningbo branches under the restructuring strategy.
In May 2019, Chinese regulators seized control of Inner Mongolia-based Baoshang, which had over $22.68bn in outstanding loans in 2016, citing credit risks.
As per the report, a fund managed by the Chinese central bank pumped CNY8.89bn into Huishang Bank in August to help it recoup losses incurred due to the Baoshang Bank deal.
While Zhongjing Xinhua has been a major shareholder in Huishang Bank since 2006, post capital infusion, the fund became the lender’s second-largest shareholder.
In other Chinese banking news, last month, media reports emerged that Zhongyuan Bank will buy three other local banks. These include Bank of Luoyang, Bank of Pingdingshan and Bank of Jiaozuo China Travel Services.
