China launches 350 bil­lion yuan fund to help re­struc­ture state-owned firms

The Sun (Malaysia) - - SUNBIZ -

BEI­JING: A pri­vate equity fund worth 350 bil­lion yuan (RM217 bil­lion) has been launched in China to help with the re­struc­tur­ing of state firms, a news­pa­per run by Xin­hua news agency re­ported yes­ter­day.

The China State-owned En­ter­prises Re­struc­tur­ing Fund will be man­aged by the Sta­te­owned As­sets Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion (SASAC), ac­cord­ing to the Economic In­for­ma­tion Daily.

The re­port said 10 state-owned en­ter­prises have es­tab­lished the fund to help with re­struc­tur­ing of state firms, in­clud­ing merger and ac­qui­si­tion deals, as part of gov­ern­ment ef­forts to ad­vance sup­ply side re­form. The 10 firms have pro­vided ini­tial reg­is­tered cap­i­tal of 131 bil­lion yuan, the news­pa­per said. No de­tail was pro­vided on the source of the rest of the equity fund.

The 10 firms in­clude China Mo­bile Ltd, China Rail­way Rolling Stock Corp, China Pe­tro­leum & Chem­i­cal Corp and China Cheng­tong Hold­ing Group Ltd, a re­struc­tur­ing plat­form su­per­vised by SASAC that will lead the fund.

China is em­bark­ing on a re­vamp of its mas­sive but debt-rid­den state sec­tor, which has strug­gled un­der a sys­tem that re­quires firms to max­imise economic gains while ful­fill­ing gov­ern­ment pol­icy ob­jec­tives. – Reuters

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