China Cinda Asset Management Corp, one of the country's four bad loan managers, plans to raise as much as $2.5 billion in its Hong Kong initial public offering, IFR reported on Thursday, citing sources familiar with the deal.

The offering will provide a rare view into China's financial system with investors keen to scan Cinda's upcoming IPO prospectus for recovery rates on bad loans, its main holdings and the way in which it values billions of dollars in real estate.

Cinda is one of four asset management companies that Beijing established in 1999 to absorb toxic assets held by the China's four biggest banks. It is the most profitable and the first to seek a public listing, with company disclosures showing large and steady growth of its operations.

Some investors have been quite positive about the offering, saying demand for the company's services will rise in sync with an increase in non-performing loans across the country. But others worry about the lack of clarity over its bad loan pricing policies, recovery rates and efforts to diversify into other financial services.

Cinda is currently offering 5.3 billion shares and set a range of HK$3.00 to HK$3.58 per share, valuing the IPO at up to HK$19 billion, IFR, a Thomson Reuters publication said.

But it added that the final number of shares in the IPO is still under discussion.

Cinda has said its asset management business made a net profit of 7.2 billion yuan ($1.2 billion) in 2012, a rise of 6 percent over the previous year.

It has stakes in a raft of companies obtained through debt-to-equity swaps, including holdings in Aluminum Corporation of China (Chalco) and China Gezhouba Group, the main construction firm in charge of the massive Three Gorges Dam project. It has property holdings worth at least 2.3 billion yuan, mostly seized from companies that failed to pay their loans.

When the bad loan firms were created, they borrowed money from the banks they were assigned to, using the cash to buy the debt. Cinda was set up to take on the bad loans at China Construction Bank, the country's No. 2 lender.

Joint coordinators for the IPO are Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs, Morgan Stanley and UBS, IFR has reported previously.

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