CCB signs $4.3 bn of debt/equity swaps

SHANGHAI: China Construction Bank Corp (CCB) has signed around 30 billion yuan ($4.31 billion) worth of debt-for-equity swaps with eastern Anhui province’s stateowned coal and steel firms, the official Xinhua news agency said.

Since China’s policymakers re-launched the debt-for-equity scheme in October to ease the borrowing overhang of its struggling firms, the country’s banks have rushed to sign deals with state-owned enterprises to ease their burden.

The country’s second biggest lender CCB has signed a 30 billion yuan debt-forequity framework agreement with Huainan Mining Industry (Group) Co, Huaibei Mining Group and Magang (Group) Holding, the parent company of Maanshan Iron & Steel Co, to reduce leverage and increase profits, said Xinhua.

CCB also agreed to provide Huainan Mining, Huaibei Mining and Wanbei CoalElectricity Group with more than 30 billion yuan worth of credit within the next 5 years, together with comprehensive financial services that include investment banking and settlement services among other things, said Xinhua. CCB, Huainan Mining, Huaibei Mining, Wanbei Coal-Electricity Group and Magang Holding were not immediately available for comment when contacted by Reuters. The deal follows a CCB $739 million debt-for-equity swap with Xiamen CCRE in November. Heavy industries such as coal and steel are suffering from over-capacity as China has switched its economic growth strategy to depend more on higher-end technology and consumption. — Reuters