China Huarong Asset Management, one of China’s big four bad debt managers, is extending its reach into the brokerage business as it invests in Freeman Fintech, a Hong Kong-listed company that focuses on securities brokerage and corporate finance advisory services.
The bad debt manager is investing $100 million in the form of convertible bonds issued by Freeman Fintech, which have a four percent interest rate payable semi-annually to subscribers.
It is investing through its Macau arm, China Huarong Macau (HK) Investment Holdings.
The bonds can be converted into Freeman Fintech shares at HK$0.425 per share.
Assuming the company exercises its conversion rights in full, a total of 1.84 billion conversion shares will be issued, representing 12.81% of the existing issued share capital and 11.36% of the issued share capital as enlarged by the issue.
Freeman Fintech is an investment holding company that offers securities and options trading, insurance brokerage, financing, and other related services. It plans to use the proceeds for general working capital.
It mainly operates businesses in Hong Kong and is also involved in money lending, the provision of pawn loan services and the provision of financial lease services through its subsidiaries.
Freeman Fintech is one of the major shareholders in Shengang Securities, the first full-licensed joint venture securities company set up in the Shanghai Pilot Free Trade Zone under the framework of the Closer Economic Partnership Arrangement between Mainland China and Hong Kong.
Huarong, which set up its Macau unit in December in what it described as a push to support China's Bealt and Road Initiative, was advised by DLA Piper.
