A Chinese city bank planning on listing in Hong Kong has indicated it has more than $440m in exposure to Hanergy Group debt, in the first case of a Chinese bank detailing its exposure to the embattled thin film solar company.
Shares in Hanergy’s Hong Kong listed unit were suspended in May after a spectacular half-hour plunge. Although the company’s founder Li Hejun had pledged Hanergy shares as well as a hydropower dam and other assets in China as collateral for loans, no Chinese institution has yet publicly confirmed it has outstanding loans to Hanergy or Mr Li.
Mr Li has called the share suspension a “disaster” for his company — Hanergy has fired thousands of employees. The Financial Times this year detailed Hanergy Group’s reliance on high-interest shadow banking loans and a high level of related transactions between the parent company and the listed unit.