China Finance

The country’s 4 major state-owned bank plan to swap the debt for equity in the underlying enterprises (to off-load the bad loans). The equity stake will then be sold to the market

• The country’s 4 major state-owned bank plan to swap the debt for equity in the underlying enterprises (to off-load the bad loans). The equity stake will then be sold to the market
• China Construction bank has begun the process

Asset Management Companies (AMCs)

• Such set up is a bold attempt to clean up the mess in its banking industry-- bad loans official estimate to be about 1.8 trillion Yuan or $220 billion-- some estimate to be US$1.08 trillion
• Cinda Asset Management Corporation, a registered capital of RMB 10 billion provided by the ministry of finance, was set up in April, 1999 to take over the compromised assets (non-performing loans) of CCB (RMB 220 billion)
• Cinda is funding via bond issues
• Cinda uses debt-for-equity swaps strategy to alleviate the interest payment for state-owned enterprises

Cinda did a debt-for-equity deal (RMB 60 million) for Beijing Cement Plant.

• Cinda did a debt-for-equity deal (RMB 60 million) for Beijing Cement Plant.
• Beijing has launched an asset management company to take over bad loans held by the Bank of China. China Orient Asset Management (COAM) is the second such company to be set up as part of a drive to reduce banks bad debts. COAM, a registered capital of Rmb10bn ($1.2bn), would be allowed to sell stock and creditor rights as part of its efforts to raise funds to buy Bank of China's non-performing loans.
• Dongfeng-Citroen Automobile Co (Wuhan-based joint venture between Chinese and French care makers) convert part of its 12 billion Rmb ($1.45 b) debt into equity.

City of Shanghai has also launched its first state-owned asset management company as part of state enterprise reform.

• City of Shanghai has also launched its first state-owned asset management company as part of state enterprise reform.