Hengfeng Bank Co. Ltd. plans to issue 100 billion shares through a private placement, according to a Dec. 18 statement.
China's sovereign wealth fund Central Huijin Investment Ltd. plans to acquire 60 billion shares of the bank, while state-owned Shandong Financial Asset Management Co. Ltd. will purchase 36 billion shares. Singapore's United Overseas Bank Ltd. and other investors will subscribe to the remaining 4 billion shares. The private placement is subject to regulatory approval from the China Banking and Insurance Regulatory Commission.
The sovereign wealth fund agreed to make a strategic investment in the Chinese city commercial bank in August amid a restructuring program led by the local government of China's Shandong province, as the lender was facing liquidity issues. The investment was expected to boost the lender's capital adequacy ratio and improve its governance.
The lender did not disclose other details of the placement.