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Huarong Asset Management Co will kick off an international roadshow in Europe and North America over the next few months to sell off some of the non-performing assets it has acquired from the Industrial and Commercial Bank of China (ICBC) to foreign investors.
The company will reorganize the assets into packages and promote them to investors during the show, Huarong President Yang Kaisheng told reporters at the China Development Forum 2001 on Saturday in Beijing.
Yang pledged to ensure transparency and fairness in the process and try to clinch favourable prices for the assets by maintaining and even increasing their value through efficient management.
But he declined to confirm the value of the assets.
"We will strengthen co-operation with overseas investment banks and strategic investors to make more non-performing assets productive again," said Yang.
He said there is no major obstacles for foreign investors purchasing the assets and hoped to attract more interest as a result of the roadshow.
Huarong was the biggest of the four asset management companies (AMCs) set up by the Chinese Government in 1999 to take over bad loans from the "big four" State-owned banks.
The AMCs have so far taken over about 1.4 trillion yuan (US$168 billion) of such non-performing assets.
Huarong itself had purchased 407.7 billion yuan (US$49 billion) of assets from ICBC by the end of last year, which involved 71,000 enterprise debtors.
Much of the debt has been transferred into equity held by the AMCs in the indebted firms during the debt-to-equity swap.
The State Council issued provisions on asset management late last year that allows the AMCs to transfer or sell the equities to investors both at home and abroad.
To further clarify the process, the Supreme People's Court is expected to soon issue judicial explanations for asset purchase, management and disposal by the AMCs, according to Yang.
"Foreign investors are encouraged to purchase such equities that can help them enter the domestic business while making the non-performing assets perform again," said Yang.
But not all sectors are accessible, he admitted, adding that the takeover should strictly abide by the regulatory framework.
A major dispute stems from the handling of creditor's rights, referring to debt that has not yet been transferred to equity.
The authorities still worry that selling or transferring creditor's rights to foreign companies might increase the volume of external debt, said Yang.
(China Daily 02/19/2001)
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