China’s finance ministry is reportedly considering a proposal to restructure its shares in bad debt managers into a new holding company, amid ongoing pressures for the troubled Huarong.
The proposal includes the transferal of the ministry’s shares in China Huarong Asset Management and three other bad debt managers to a new holding company, according to a «Bloomberg» report citing unnamed sources.
The holding company is modeled after the same structure that holds government stakes in state-run banks.
Separation of Powers
The creation of the holding company is being viewed by some officials as «a step toward separating the government’s roles as a regulator and shareholder, streamlining oversight and instilling a more professional management culture at Huarong and its peers».
External investors are also being considered to reduce the finance ministry’s controlling stakes.
No conclusions have been reached and regulators are awaiting guidance from «senior Chinese leaders», the report added.
At Least August-End
The report also noted that Huarong had reached funding agreements with state-owned banks to ensure debt repayment at last through the end of August.
Huarong also expects to complete its 2020 financial statement in the same month.
