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China encourages bad loan companies to help struggling developers – China Sec Journal

SHANGHAI (Reuters) – Chinese financial regulators have met with the country’s top bad debt management firms to explore how these asset management firms (AMCs) can participate in developer asset sales, China Securities reported on Thursday. Newspaper.

China is encouraging state-owned enterprises to acquire projects from cash-strapped developers to help ease severe liquidity strains in the sector that could threaten financial and social stability.

Bad loan companies have a wealth of experience in disposing of degraded assets, as well as project mergers and acquisitions, and their participation can help dissolve risks in China’s struggling real estate sector, the public newspaper said. .

The article did not name the regulators or the companies that had been summoned by them.

China has four major AMCs – Cinda, Huarong, China Orient and Great Wall – which were originally created to get rid of non-performing loans from major state-owned banks.

On Wednesday, China Evergrande Group said it aimed to have a preliminary restructuring proposal in place within six months as the debt-ridden developer scrambles to reassure creditors spooked by defaults since its finances began to unravel. downgrade last year.

(Reporting by Samuel Shen and Brenda Goh; Editing by Lincoln Feast.)

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