Great Wall AMC re­cast as a joint stock firm, may list on an ex­change

China Daily (Hong Kong) - - BUSINESS | MARKETS - By REUTERS

China Great Wall As­set Man­age­ment Co of­fi­cially launched as a re­struc­tured joint-stock firm on Sun­day, with an eye on a mar­ket list­ing and a big­ger role in tack­ling China’s mount­ing bad debt prob­lem.

Great Wall is one of the coun­try’s big four State-owned bad debt man­agers set up in 1999 to pur­chase non­per­form­ing loans from the coun­try’s four big­gest State-owned banks.

It has han­dled about 1.7 tril­lion yuan ($250 bil­lion) in bad debt so far.

The tran­si­tion to a share­hold­ing com­pany means Great Wall, which was pre­vi­ously wholly-owned by China’s Min­istry of Fi­nance, can now sell stakes to new share­hold­ers and list it­self on a stock mar­ket.

Great Wall chair­man Zhang Xiaosong said at a cer­e­mony in Bei­jing on Sun­day the re­struc­tur­ing marks “a new era” for the com­pany, which will con­tinue to fo­cus on bad debt so­lu­tions and as­set man­age­ment to help curb fi­nan­cial risks and sup­port China’s eco­nomic de­vel­op­ment.

The move means it could list it­self on a do­mes­tic or off­shore stock mar­ket as early as the first half of next year, thereby ex­pand­ing its cap­i­tal base so it can take a big­ger role in help­ing the gov­ern­ment man­age debt is­sues.

Se­nior of­fi­cials from the fi­nance min­istry, the cen­tral bank and the bank­ing reg­u­la­tor at­tend­ing Sun­day’s cer­e­mony em­pha­sized the im­por­tance of dis­tressed debt man­agers to help re­solve China’s cur­rent eco­nomic prob­lems, es­pe­cially bal­loon­ing debt.

“The econ­omy still faces in­creas­ing down­ward pres­sure. In par­tic­u­lar, lever­age in the non­fi­nan­cial cor­po­rate sec­tor con­tin­ues to rise and bad loans at com­mer­cial banks keep re­bound­ing,” Fan Yifei, vice-gov­er­nor of the Peo­ple’s Bank of China, said at the launch event.

“(We) need to fur­ther use fi­nan­cial as­set man­age­ment com­pa­nies to re­solve ex­ist­ing non­per­form­ing as­sets in the fi­nan­cial sys­tem to curb fi­nan­cial risks,” Fan said.

the amount of bad debt that has been han­dled by China Great Wall As­set Man­age­ment Co so far

“The cur­rent non­per­form­ing as­set mar­ket is call­ing for fi­nan­cial as­set man­age­ment com­pa­nies to play a vi­tal role,” said Yang Ji­a­cai, as­sis­tant chair­man of the China Bank­ing Reg­u­la­tory Com­mis­sion.

The newly es­tab­lished Great Wall joint-stock firm has a reg­is­tered cap­i­tal of 43.15 bil­lion yuan.

Its big­gest share­holder is China’s Min­istry of Fi­nance, which holds a 97 per­cent stake. The Na­tional Coun­cil for So­cial Se­cu­rity Fund holds 2 per­cent and China Life In­sur­ance (Group) holds 1 per­cent.

Xiao Shi­jun, head of the equity as­set de­part­ment of the so­cial se­cu­rity fund, said the fund hopes to fur­ther in­crease its stake in Great Wall AMC ahead of its planned ini­tial pub­lic of­fer­ing.

Presently, the main­land has two Hong Kong-listed AMCs: China Huarong As­set Man­age­ment Co and China Cinda As­set Man­age­ment Co.

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