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|Thursday, December 07, 2000, updated at 10:04(GMT+8)|
Sanlian Group to Invest in Troubled Baiwen Co.The capital restructuring plan of the troubled Zhengzhou Baiwen Co. in Henan was approved at the company's board meeting Nov. 30. According to the plan, which is critical to the fate of the firm, the Sanlian Group of Shandong will become a strategic investor for Baiwen.
Under the plan, the insolvent Baiwen must withdraw from its listed company all its capital, debts, businesses and staff, and transfer them to its parent company for restructuring purposes.
The plan has received a green light from the China Securities Regulatory Commission (CSRC) and Baiwen's biggest creditor, China Cinda Asset Management Corporation.
Meanwhile, the authorities' investigation into Baiwen's huge debt and illegal operations are still under way.
Sanlian Group, one of the eight largest enterprises in Shandong province, will input into Baiwen part of the quality assets and major retail business of Sanlian Shangshe, one of its exclusively owned subsidiaries. Sanlian will buy 1.5 billion yuan (US$181 million) of the debt Baiwen owes to Cinda at a price of 300 million yuan (US$36 million).
Sanlian, in this way, will become an indirectly listed company, with Baiwen as its shell.
After Sanlian's debt purchase, Baiwen's parent company will take over the remaining liabilities owed to Cinda, with the Zhengzhou municipal government providing a debt guarantee, the article said.
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