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Major Debt-to-Equity Project in Chongqing Signed
The Southwest China Aluminum Plant, the largest of its kind in Asia, has signed an agreement with Huarong Assets Management Corporation to convert its 2.8 billion yuan-worth of debt to equity.
The Plant, listed as one of the 512 key state-owned industrial firms in China, has an annual production capacity of 200,000 tons of aluminum.
Under the agreement, Huarong Assets Management Corporation will hold a stake of 1.6 billion yuan while Xinda Assets Management Co will have 1.25 billion yuan-worth of the plant's shares. The swap plan will help the Plant to cut its debt by 52 percent and help it turn losses into profits within the year, said a plant director. To date, the debt-to-equity swap scheme has been implemented in 10 enterprises in Chongqing covering metallurgy, automobile and chemistry, gaining 6 billion yuan (US$ 722 million) in equity value.
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