ICBC signs debt-for-eq­uity swap with Jin­dong

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

In­dus­trial and Com­mer­cial Bank of China (ICBC), the coun­try’s big­gest lender, said on Mon­day it has agreed to con­duct a 5 bil­lion yuan ($720 mil­lion) debt­for-eq­uity swap with ce­ment pro­ducer Jin­dong De­vel­op­ment Group.

The bank will use a lim­ited part­ner­ship fund to make a 2.5 bil­lion yuan in­vest­ment in Jin­dong in the first phase of the swap, ICBC said in a state­ment.

Jin­dong, head­quar­tered in He­bei prov­ince, is one of China’s big­gest con­struc­tion ma­te­ri­als com­pa­nies. Its con­trol­ling share­holder is Sta­te­owned BBMG Corp.

The deal marks the sec­ond debt-for-eq­uity swap an­nounced by ICBC since Bei­jing launched the scheme in Oc­to­ber in a bid to re­duce its $18 tril­lion in cor­po­rate debt, equiv­a­lent to 169 per­cent of do­mes­tic out­put.

Ear­lier this month, the bank said it had signed a 10 bil­lion yuan debt-for-eq­uity swap with Shan­dong Gold Group to re­duce the com­pany’s debt bur­den.

Af­ter the pro­posed $720 mil­lion debt swap, Jin­dong’s lever­age ra­tio will come down by 8 per­cent, ICBC said in the state­ment.

“Through fi­nan­cial sup­port, ICBC will help Jin­dong up­grade its in­dus­trial struc­ture and push the com­pany to in­vest more in re­search to de­velop in a re­source-con­serv­ing, en­vi­ron­men­tally friendly way and aid Bei­jing in the fight against smog,” the state­ment said.

He­bei, an in­dus­trial re­gion bor­der­ing the cap­i­tal, is one of China’s most pol­luted prov­inces.

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