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Bank Reserves Allotted for Bankruptcy Mergers Decrease
Mergers in six bankrupt industries: the coal, color, sugar, wool, silk, steel and military industries, have began to pay off. Since the start of this year, 1,093 bankrupt projects have been merged, canceling 21.4 billion yuan in bad debts.
Since the start of 1996, the state has allotted a certain amount of the banks' reserves for bad debts to be used in the merger and layoff of bankrupt companies, according to the State Economic & Trade Commission. In 1998, the reserves for bad debts totaled 90 billion yuan and more than 6,400 bankrupt companies were merged and laid off workers. Last year, 3,098 bankrupt companies merged and the reserves for bad debts totaled 83.6 billion yuan. This year, with one eye on the economic restructuring, the mergers of bankrupt companies were focused on six industries. Between 80-85 billion yuan were set aside for the mergers, but only 50 billion yuan were used.
The State Economic & Trade Commission has called for bankruptcy mergers to enter bankruptcy procedures quickly. The approval work, especially for the third group of 339 projects this year, needs to be started as soon as possible.
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