Huarong launches first online exchange for trading bad debt

China Huarong Asset Management Co Ltd, one of China’s largest State-owned asset managers, has set up an online platform for bad debt transactions, as part of its efforts to broaden channels for disposal of distressed debt and increase efficiency of transactions.

The new entity, Huarong Zhongguancun Distressed Asset Exchange Co, is the first institution in China that is dedicated to the trading of bad debt and will have a registered capital of 500 million yuan ($80 million).

It opened for business in the Zhongguancun area, which has the largest concentration of high-tech companies in Beijing, on Thursday.

The firm was jointly founded by China Huarong, along with Beijing Qibu Tianxia Technology Co Ltd and the State-owned Properties ciency of transactions,” said Xu Jia, a public relations officer at China Huarong.

“We will promote information sharing among our own subsidiaries and branches in different regions, and we hope that other State-owned asset management companies and provincial AMCs will also post information about distressed asset transactions on this platform,” Xu said.

The company completed its first bad debt transaction worth 20.8 million yuan between an arm of China Huarong and an external institution on Thursday. It also signed agreements on strategic cooperation with multiple partners, including China CITIC Bank Corp Ltd and Beijing Guotong Asset Management Co Ltd.

Over the last few years, asset management companies and commercial banks in China have explored various channels and measures to deal with distressed assets.