What’s new: The auction of 3.47 billion shares of Minsheng Securities Co. Ltd. held by troubled developer Oceanwide Holdings Co. Ltd. (000046.SZ) attracted three bidders, including two publicly traded brokerages, JD’s online auction platform showed.
The shares are being sold to pay debt by Oceanwide, which is being sued by creditors for default on a 2 billion yuan ($291 million) bridge loan in 2019.
The shares were auctioned at a starting price of 5.865 billion yuan ($827 million), equivalent to 1.69 yuan per share, JD’s online auction platform showed.
Soochow Securities Co. Ltd. and Zheshang Securities Co. Ltd. said Monday night in statements that they planned to participate in the auction, which started Tuesday morning. The third bidder was not identified, but some market participants speculated that Shanghai state-owned enterprises are interested.
The background: Oceanwide’s unit Wuhan CBD Co. Ltd. was sued by Shandong Hi-Speed Group Corp, a state-owned highway operator, for default on the three-month bridge loan.
Oceanwide owns 3.55 billion shares of Minsheng Securities, or 31.03%. After the auction, its holdings will decrease to 0.25%.
The loan was not secured by the Minsheng Securities shares but by a property owned by Oceanwide in Wuhan, according to a person close to Oceanwide.
Separately, China Minsheng Banking Corp. Ltd., the parent of Minsheng Securities, is suing Oceanwide and its units, including Wuhan CBD Co., over a 7 billion yuan loan dispute. Oceanwide and related entities also own a 5.8% stake in China Minsheng.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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