Top shareholder of China’s troubled Zhongrong Trust plans to delist
2023.08.29 21:52
© Reuters. FILE PHOTO: The office building of Zhongrong International Trust, a trust company partially owned by Zhongzhi Enterprise Group, in Beijing, China August 22, 2023. REUTERS/Florence Lo/File Photo
SHANGHAI (Reuters) – Jingwei Textile Machinery Co, the biggest shareholder of troubled Chinese trust firm Zhongrong International Trust Co, said it plans to delist from the Shenzhen Stock Exchange to “protect the interests of small shareholders”.
Jingwei’s shares, which had been suspended pending the announcement, will resume trading on Wednesday.
Zhongrong International Trust missed payments on dozens of investment products since the end of July, according to investor sources, triggering contagion fears in an economy that is already pressured by a deepening property crisis.
“Due to changes in market conditions, the company’s operations face huge uncertainty that could have a major impact,” Jingwei said in an exchange filing late on Tuesday.
Under a proposal from its parent to protect the interest of small shareholders, Jingwei plans to withdraw its listing on the Shenzhen bourse, according to the statement. It will instead seek to float on the New Third Board, a smaller equity trading venue in Beijing.
The proposal, which involves a cash offer for investors to opt out, still requires shareholder approval.
Asset manager Zhongzhi Enterprise Group, the second biggest shareholder of Zhongrong International Trust, told investors earlier this month it is facing a liquidity crisis and will conduct a debt restructuring, according to video footage of a meeting.
