BEIJING, Aug 17 (Reuters) – China Huarong Asset Management Co. Ltd warned traders a internet reduction of 102.9 billion yuan ($15.88 billion) in 2020 on Wednesday, immediately after delaying its once-a-year report for nearly 5 months amid restructuring uncertainties.
Huarong, a single of the four state distressed debt professionals and whose former chairman grew to become matter of one of the country’s best profile corruption conditions, also stated it has signed an financial investment agreement with a point out consortium led by the CITIC Group Corp.
The agreement would “replenish company’s cash … consolidate company’s foundation for sustainable operations”, it stated.
The Beijing-dependent company, which counts China’s finance ministry as its greatest shareholder, did not elaborate on the amount of the strategic financial investment, and stated the offer was still subject to regulatory approvals.
The corruption case resulted in the execution of former chairman Lai Xiaomin in January just after a probe into the period when he expanded Huarong into a money conglomerate.
He was convicted of obtaining or trying to get bribes totalling 1.788 billion yuan from 2008 to 2018, when he was also a senior banking regulator.
The revenue warning primarily reflected a substantial transform in provision for credit history impairment, Huarong claimed in a filing to Hong Kong inventory exchange, citing assessments on present possibility belongings, and threats of some subsidiaries.
“As the demo against previous Chairman Lai Xiaomin for bribery, embezzlement and bigamy commenced … the group continuously cleared and disposed the hazard belongings induced by his intense procedure and disorderly growth for the duration of his tenure,” Huarong mentioned, incorporating that the COVID-19 pandemic also deteriorated its asset quality at “a quicker speed” very last 12 months.
Irrespective of the gain warning, the organization reported its liquidity was ample and could repay the exceptional offshore debts in time.
The company missed the March 31 deadline for submitting its 2020 earnings, sparking a rout in its U.S. dollar-denominated bonds that distribute to other issuers amid concern that a default could see foreign investors losing out.
Amid a thrust to market non-main belongings as aspect of its enterprise revamp, the company has introduced strategies to provide stakes in a distressed asset exchange device, a consumer finance device, and restructure its have faith in subsidiary.
Huarong posted 209.9 million yuan of gain for the six months finished June 30, 2020, a revenue fall of 91.7% compared with the similar interval of 2019. ($1 = 6.4800 Chinese yuan renminbi) (Reporting by Cheng Leng, Zhang Yan, and Ryan Woo Enhancing by Alison Williams)