Fi­nan­cial ser­vices plat­form to help SOEs get rid of debts

China Re­form’s arm to boost fi­nan­cials via sev­eral en­ti­ties

China Daily (Hong Kong) - - FRONT PAGE - By LI XIANG lix­i­ang@chi­nadaily.com.cn

China Re­form Hold­ings Corp Ltd, a State con­glom­er­ate that spe­cial­izes in the re­struc­tur­ing and re­cap­i­tal­iza­tion of State-owned en­ter­prises, is plan­ning to boost its fi­nan­cial arm to help clear the debts of State-owned en­ter­prises and in­crease their ef­fi­ciency.

The com­pany will ac­cel­er­ate the es­tab­lish­ment of a com­pre­hen­sive fi­nan­cial ser­vices plat­form, in­clud­ing a fi­nan­cial firm to help SOEs pay off debts and raise funds; a fac­tor­ing en­tity to im­prove SOEs’ cash flow; an on­line fi­nanc­ing plat­form; and an in­sur­ance bro­ker­age to help SOEs man­age risks.

The plan was re­vealed in the com­pany’s lat­est prospec­tus for its 3 bil­lion yuan ($435 mil­lion) bond of­fer­ing. The pro­ceeds from the bond sales will be used to pay debt and re­plen­ish the cash flow gaps of its sub­sidiaries.

In the prospec­tus, the firm laid out its fu­ture busi­ness plans, es­pe­cially in­clud­ing boost­ing its ven­ture cap­i­tal in­vest­ment in strate­gic emerg­ing in­dus­tries, such as high-tech and in­no­va­tive sec­tors, to fa­cil­i­tate in­dus­trial up­grad­ing of the SOEs.

Xu Hong­cai, di­rec­tor of the eco­nomic re­search de­part­ment at the China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes, said the move to set up a com­pre­hen­sive fi­nan­cial plat­form would strengthen the fi­nan­cial ca­pac­ity of China Re­form Hold­ings and in­crease the syn­ergy with its sub­sidiaries in var­i­ous sec­tors.

“It will broaden cap­i­tal source and en­rich the means for it to con­sol­i­date and op­ti­mize the value of SOE as­sets,” he said.

The plan to boost the com­pany’s fi­nan­cial ser­vices ca­pa­bil­ity also un­der­scores the govern­ment’s in­ten­tion to rely on fi­nan­cial means and tools to deepen the re­form of the coun­try’s SOEs, Xu added.

China Re­form Hold­ings was es­tab­lished in 2010, as the govern­ment ac­cel­er­ated the re­struc­tur­ing of SOEs.

Wholly owned by the State-owned As­set Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion, the con­glom­er­ate has 93 sub­sidiaries in sec­tors rang­ing from min­ing to fi­nan­cial ser­vices and telecom­mu­ni­ca­tions.

The to­tal as­set of China Re­form Hold­ings ex­ceeded 150 bil­lion yuan as of the end of last year. It re­ported prof­its of 4.5 bil­lion yuan in 2015, ac­cord­ing to its web­site.

In 2015, the firm set up a pri­vate eq­uity in­vest­ment en­tity to fa­cil­i­tate SOEs’ over­seas in­vest­ment.

It will broaden ... the means for it to con­sol­i­date and op­ti­mize the value of SOE as­sets.” Xu Hong­cai, di­rec­tor of the eco­nomic re­search de­part­ment at the China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes

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