Chinese Non-Performing Assets Sold to Int'l Bidding Team

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Last updated at: (Beijing Time) Monday, December 03, 2001

Chinese Non-Performing Assets Sold to Int'l Bidding Team

The China Huarong Asset Management Corporation announced Thursday in Beijing that it has agreed to sell non-performing assets with a book value of 10.8 billion yuan to an international bidding team headed by Morgan Stanley.The move is widely seen as a significant step by China to accelerate the handling of huge amounts of non-performing financial assets bought by the AMCs from State-owned commercial banks.

China's first transaction of non-performing assets through int'l bidding

The China Huarong Asset Management Corporation announced Thursday in Beijing that it has agreed to sell non-performing assets with a book value of 10.8 billion yuan to an international bidding team headed by Morgan Stanley.

This is China's first transaction of non-performing assets through international bidding.

Huarong President Yang Kaisheng said that the transaction includes four packages of non-performing assets involving 254 enterprises from 18 Chinese provinces and municipalities.

Huarong is the first of China's four asset management corporations (AMC) to offer non-performing financial assets to international investors via the public bidding system.

Move viewed as a significant step

The move is widely seen as a significant step by China to accelerate the handling of huge amounts of non-performing financial assets bought by the AMCs from State-owned commercial banks. It is also thought of as an easy way for international investors to enter China's financial market.

Huarong's bidding process began in February this year when it signed a contract for advice and trading services with Earnest & Young.

On November 19, Huarong offered five packages of non-performing assets with a combined book value of 15.6 billion yuan involving 356 enterprises in the industries of real estate, construction materials, metallurgy, textiles, electronics, commerce, chemicals, transportation and others.

Three bidding teams consisting of seven overseas investors and domestic enterprises entered bids.

China's Asset Management Begins Int'l Roadshow

China's Huarong Asset Management Corporation, China's largest such company, kicked off an international roadshow in June 2001, in a fresh move to lure investors in Britain and the United States.

The two-week-long roadshow is China's first move of the kind to introduce to foreign investors the investment potential of the country's non-performing assets and its policies and legal framework regarding the sales of the assets.

By the end of last year, Huarong had retrieved 3.28 billion yuan worth of asset, including 2.06 billion yuan in cash, by handling 7.86 billion yuan of the non-performing assets.

Huarong aims to dispose of 150 billion yuan worth of non-performing assets in three years and will strive to handle the remaining part by the year 2006.

Foreign Investors Bid for Non-Performing Assets

Foreign Investors Welcome to Buy Non-performing Assets in China