Chinese asset management firm to IPO in Hong Kong

China Cinda Asset Management Company plans a US$3 billion IPO in 2014.

Cinda is one of four state-owned funds or “bad banks” created in 1999 to buy bad debts from banks. The asset manager may start the share sale in 2014.

In March 2012, it said it had begun preparations for a domestic and overseas IPO. The company, however, didn’t give a timetable or detailed plan.

The Ministry of Finance owns 83.5% of Cinda while the national pension fund owns 8%. UBS holds 5%; Citic Capital Holdings Ltd., 2% and Standard Chartered Plc, 1.5%.

Cinda raised US$1.7 billion selling a 16.5% stake to the pension fund, UBS, Citic Capital and Standard Chartered in March 2012, valuing the company at US$10.1 billion.

Cinda could have recovered up to US$241 billion in bad loans between 1999 and 2011. Its profit rose to US$1.2 billion last year from US$1.1 billion in 2011.

Cinda and its fellow bad banks, China Orient Asset Management Corporation, Great Wall Asset Management and Huarong Asset Management Company Corporation, were established in 1999 to help rid the banking industry of US$225 billion in non-performing loans.

Cinda has expanded into underwriting stock and bond sales. Analysts said the company may attract investors with its diversified financial services but would have to clearly explain its growth, sustainability and risks. It had some 20,500 employees and 31 branches across China in 2011.