China's four major financial asset management companies (AMCs) have retrieved 140.9 billion yuan (US$17.1 billion) in cash, or 20.5 percent of the total disposed nonperforming assets from the country's four major state-owned banks, the China Banking Regulatory Commission (CBRC) said on Monday.
Total disposed nonperforming assets were valued at 688.6 billion yuan (US$83.2 billion).
The four companies, China Huarong, China Great Wall, China Orient, and China Cinda, were created in October 1999 to dispose of the nonperforming assets of the country's Big Four state-owned banks.
The banks are the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank.
Huarong retrieved 42.6 billion yuan (US$5.2 billion) in cash from the 214.4 billion yuan (US$25.9 billion) worth of bad assets it handled. China Great Wall took in 22.2 billion yuan (US$2.7 billion) of 213.6 billion yuan (US$25.8 billion); China Orient, 24.4 billion yuan (US$3.0 billion) of 106.8 billion yuan (US$12.9 billion); and China Cinda, 51.7 billion yuan (US$6.3 billion) of 153.7 billion yuan (US$18.6 billion).
China Orient announced on Monday that it will issue a 50.0 billion yuan (US$6.0 billion) tranche of nonperforming assets, the company's largest sale ever, to foreign and domestic investors.
"For international investors, it is clearly a good sign as it's a step further by China's asset management companies," Michael Harris, a partner at PricewaterhouseCoopers, told China Daily.
He said international investors are eager to take larger stakes in China's nonperforming assets and sellers need to offer more opportunities to attract them.
According to Li Xin, general manager of China Orient's asset management department, this round of assets comes primarily from inventory the company acquired from Bank of China in 2000.
A total of 61 asset pools were put up on Monday, involving foreign trade, property and machinery companies in more than 20 provinces. The biggest pool amounts to more than 4 billion yuan (US$480 million). Li said this will provide investors with flexibility and choice.
Nineteen investors, including Deutsche Bank, Morgan Stanley, Credit Suisse First Boston and Galaxy Securities, signed letters of intent with China Orient for 10 of the asset pools.
(Xinhua News Agency, China Daily April 19, 2005)