Wednesday, April 20, 2005

Asset_50 billion NPL sold

China Orient Asset Management Corp., one of the country's four major state-owned asset agencies, sold ten packages of nonperforming assets to 19 overseas and local investors, Asian Wall Street Journal reported citing the official Financial News.

The ten packages were part of more than 50 billion yuan, or about US$6 billion, of distressed assets auctioned by China Orient. In March, China Orient's annual report said it would sell the nonperforming assets of 50 billion yuan by the end of the year, getting back 5.5 billion yuan, or about US$600 million, which accounts 11 percent of the total assets.

The 19 investors included foreign investors such as Deutsche Bank AG, German's largest lender, the Credit Suisse First Boston Inc, a unit of Zurich-based Credit Suisse, Switzerland's No.2 bank, J.P. Morgan Chase & Co., U.S's second biggest bank , Hong Kong-based Pacific Alliance Group, Mellon HBV Alliance Group in New York and London, and local investors from Shanghai, Anhui Province, Hubei province.etc. (China daily has mistaken J.P. Morgan with Morgan Stanley in its story) . Details for each investor are not made public.

Non-performing asset has been a barrier for Chinese companies, especially commercial banks, in China's financial reform. In 1999, four asset management, including China Orient, China Huarong Asset Management Inc., China Xinda Asset Management Inc., and China Great Wall Asset Management Inc., were set up to manage the separated nonperforming assets from commercial banks to push banks listed in overseas market.

China Banking Regulatory Commission reported on April 18, a day before China Orient's selling, that four asset management companies has sold nonperforming assets of 688.55 billion yuan, or US$67 billion, accounting for about 20 percent of the total assets, till this March. The assets China Orient sold are 106.7 billion yuan, or 22 percent of the total sold assets, ranked as second among four companies after China Xinda.

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