China Oriental Asset Management has sold almost 1.8 billion yuan (about HK$1.68 billion) worth of non-performing loans for the Bank of China to a group of foreign investors. The investors, including investment funds from the United States, have already paid the state-owned asset manager US$21 million in cash for the loans. However, a China Oriental spokesman declined to reveal the identities of the investors. After months of due diligence and negotiations, China Oriental and the consortium of investors signed a three-year co-operation agreement on December 6. According to the agreement, the investors will pay 10 per cent of the non-performing loans' book value to China Oriental in US dollars within 14 days. Unlike announcements by other Chinese asset managers, China Oriental did not say how much of the non-performing loans it expected to recover. A spokesman would only say that it expected a recovery rate of more than 10 per cent. The book value of the non-performing loans borrowed by 55 companies in Guangdong province was US$217.37 million. The companies are involved in property, manufacturing, trade and light industry. As part of the agreement, China Oriental will act as an agent responsible for collecting the loans. In turn, the foreign investors will pay China Oriental an agent fee for its services. China Oriental was set up in 1999 to buy and dispose of the Bank of China's non-performing assets. Last month, the Bank of China said it had a non-performing loan ratio of 25.81 per cent as at the end of September, according to international accounting standards. China Oriental president Bai Shezhen last month said 15.42 billion yuan worth of assets had been sold and 6.56 billion yuan worth of assets had been recovered by the end of September. But this month's sale was the first time China Oriental had disposed of non-performing assets to foreign investors.