November 23, 2015 / 4:46 AM / 4 years ago

UPDATE 1-Bank of Jinzhou halves Hanergy exposure ahead of $943 mln HK IPO

* IPO consists of 1.32 bln shares in HK$4.64-HK$5.54 range-IFR

* Bank of Jinzhou had previously tried to list in Shanghai (Adds Hanergy exposure, details of the bank’s IPO application))

HONG KONG, Nov 23 (Reuters) - Bank of Jinzhou Co Ltd IPO-JZBN.HK launched an up to $943 million Hong Kong IPO on Monday to bolster its balance sheet after the Chinese lender halved its exposure to Hanergy Group, the parent of troubled solar equipment maker Hanergy Thin Film Power Group Ltd .

The 1.32 billion shares in the initial public offering are being offered in an indicative range of HK$4.64 ($0.5987) to HK$5.54 each, Thomson Reuters publication IFR reported, citing a term sheet for the transaction. The shares represent 23.6 percent of the bank’s enlarged capital.

The Liaoning province-based city commercial bank had applied for a listing in Hong Kong in April but the application stalled in June after the stock exchange questioned the bank’s exposure to Hanergy, IFR previously reported, citing people close to the situation.

It had tried to list in Shanghai in 2011, but gave up on the plan after waiting for approval for almost three years, according to its Hong Kong listing documents.

Bank of Jinzhou didn’t immediately reply to a Reuters request for comment on the IPO.

The lender makes no mention of Hanergy’s name in its filings with the Hong Kong stock exchange, instead disclosing it had exposure “to one particular ultimate group borrower, who was subject to negative media reports on its business and financial position”.

Bank of Jinzhou also said the borrower has a unit listed in Hong Kong that had trading of its shares suspended and has been under investigation by the Securities and Futures Commission since May 2015.

The exposure, which came through investments in debt instruments and securities classified as receivables, totaled 9.46 billion ($1.5 billion) yuan at the end of June, according to the filings. But in August Bank of Jinzhou slashed it by 50 percent to 4.69 billion yuan through several different transactions.

The bank sold down a combined 1.97 billion yuan of investments to two unnamed financial institutions in mainland China and it also entered into an agreement with the borrower to receive an early repayment of 2.6 billion yuan.

About 90 percent of the IPO will be new shares from the bank, and the remainder stock sold on behalf of China’s National Council for Social Security Fund (NSSF). ($1 = 6.3878 Chinese yuan renminbi) ($1 = 7.7499 Hong Kong dollars) (Reporting by Fiona Lau of IFR; Writing by Elzio Barreto; Editing by Kenneth Maxwell and Muralikumar Anantharaman)

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