Chinese bad debt manager Huarong will receive a bailout totaling more than $6 billion from a consortium of five state firms.
Huarong will receive new capital totaling 42 billion yuan ($6.6 billion) from a consortium led by Citic Group, according to an exchange filing.
The consortium also includes China Insurance Investment’s Rongxin Fund, China Cinda Asset Management, China Life and a unit of Industrial and Commercial Bank of China (ICBC).
Share Issuance
In turn, Huarong intends to issue up to 39.22 billion domestic shares and 1.96 billion Hong Kong-listed shares to the consortium in a deal that would allow Citic to assume the Chinese government’s controlling stake.
«It is of the view that the Issuance is the only practical measure to solve the capital insufficiency difficulty of the company and to satisfy the regulatory requirement,» Huarong said in the filing.
This marks the latest development for one of China’s four original bad debt managers which triggered a sell-off in its U.S. dollar-denominated bonds after missing a March deadline to file its 2020 earnings.
