Huarong, one of China’s four biggest asset management companies (AMCs) which counts China’s Ministry of Finance as its biggest shareholder, has been hit by an offshore bond selloff and a suspension in its shares since March 31, after it announced a delay in its earnings report due to a “relevant transaction” yet to be finalised.
That is the latest in the troubles for the distressed-debt manager whose failed investments and expanded businesses have forced it into restructuring talks since 2018 and whose Chairman Lai Xiaomin was executed in January after a graft probe.
Huarong and its subsidiaries currently have outstanding offshore bonds worth $22.39 billion, according to Refinitiv data, with some $3.57 billion of them are maturing in 2021.
The latest measures urged by the financial regulators are aimed at containing contagion and to make sure Huarong’s onshore cash situation is stable, according to four sources who include creditors of Huarong and who have direct knowledge of firm’s asset restructuring plan. ($1 = 6.5301 Chinese yuan renminbi) (Reporting by Cheng Leng, Kevin Huang, Rong Ma, Ryan Woo in Beijing and Andrew Galbraith in Shanghai; Editing by Vidya Ranganathan and Kim Coghill)