Huarong to Manage US$49 Billion Bad Assets from ICBCHuarong Asset Management Co., China's largest financial assets management firm, has finished acquiring the bad assets of the Industrial and Commercial Bank of China (ICBC), one of China's biggest state-owned commercial banks, and will now begin to manage them.Huarong President Yang Kaisheng made the announcement in Beijing on Oct. 20. The bad assets are worth 407.7 billion yuan (US$49.2 billion) and had accrued when the bank made state-directed loans to 71,000 firms, most of which were state-owned, over the last few years. Huarong was founded on October 19 last year to help with state-owned enterprise (SOE) reform. The company's SOE debtors account for 25 percent of the total number of China's SOEs. According to Yang, by the end of this September, Huarong had retrieved more than 400 million yuan (US$48.3 million) through debt reorganization, recovery, auction and interest collection. It also helped review the debt-to-equity swap plans of nearly 500 large and mid-size SOEs, 333 of which are headed by Huarong, the article said. In phase two, said Yang, Huarong will manage the bad assets it has acquired through sales, displacement, assets reorganization and debt-to-equity swaps. It will help debtors with mergers and acquisitions, reorganization and packaging for public offering, and will offer management consulting services. It will also help insolvent enterprises file for bankruptcy and liquidation. He added that the company would recover assets and reduce losses by selling debt and equity rights to domestic and overseas investors. He said that many overseas companies had shown an interest in buying such rights and that negotiations are under way, the article reported. To facilitate assets management, Huarong set up a consulting committee comprised of renowned experts in domestic and overseas economic and financial circles. |
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