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Most Debt-to-Equity Enterprises to Turn in Profits
More than 80% out of 580 debt-to-equity enterprises as have been approved by the state will make profits this year, according to Sheng Huaren, minister in charge of the State Economic and Trade Commission.
To help those of large and medium-sized state-owned enterprises (SOEs) out of debts, the Central Government unveiled the debt-to-equity measure last year. Following a reform by banks, ways were sought as a solution to problems of their non-performed assets, hence a general swapping of debts of enterprises for shares of banks by the State Asset Management Company.
By now, there are 580 enterprises approved to have gone on a debt-to-equity move involving a total of 405 billion yuan of debts having been converted for shares of banks and a complete suspension of bank interest to be exacted on them since last April.
Sheng noted that as an important move to revive loss-making enterprises debt-to-equity swapping has greatly helped alleviate their debt burden, work for a change of management and handle well non-performed assets by the banks. Thanks to a cut of over 50% of interest rate from previous 70% an estimated amount of 20 billion yuan of debt interest payment has been saved by the enterprises, Sheng added.
By PD Online Staff Li Yan
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