China Huarong Said to Shortlist Cornerstone Investors for IPO

China Huarong Asset Management Co., the nation’s biggest bad-loan manager, has shortlisted more than 10 potential cornerstone investors for its $2.8 billion initial public offering, people with knowledge of the matter said.

The prospective buyers Huarong may invite to join the deal include China General Nuclear Power Corp., China Oceanwide Holdings Group, China Taiping Insurance Holdings Co. and Hong Kong brokerage Emperor Capital Group Ltd., according to the people. Huarong plans to select 10 cornerstone investors to buy stock in the IPO, they said, asking not to be identified because the information is private.

Beijing Infrastructure Investment Co., Foresea Life Insurance Co., Sino-Ocean Land Holdings Ltd. and State Grid Corp. of China were also shortlisted, the people said. Huarong hasn’t made a final decision on the cornerstone investors, and it’s possible other companies may still join the deal, according to the people.

Huarong and two of its shareholders, China’s Ministry of Finance and Cofco Corp., plan to offer a combined 6.3 billion shares at HK$3.03 to HK$3.39 apiece, people with knowledge of the matter said Tuesday. The Beijing-based company aims to set aside about 70 percent of the IPO for so-called cornerstone investors, the people said. 

Such investors typically agree to hold on to their stock for six months in return for guaranteed allocation. A Hong Kong-based external spokeswoman for Huarong declined to comment.

Huarong is one of four Chinese companies set up by the government in 1999 to clean up state-owned banks. The bad-loan manager had more than 600 billion yuan ($94.6 billion) of total assets at the end of last year, its website shows.

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