China regulator says Huarong operations are normal, has ample liquidity

Name: China’s economy expands record 18.3 per cent in the first quarter of 2021
Uploaded: 2021-04-16T10:15:09.000Z
Duration: 2 min 1 s
Description: China’s economy expands record 18.3 per cent in the first quarter of 2021

Huarong has roiled Asian credit markets since it failed to meet a March deadline for releasing its 2020 earnings

Huarong has domestic and offshore debt equivalent to US$42 billion, with US$17.1 billion due by the end of 2022

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China Huarong Asset Management’s office in Beijing. Photo: Reuters

Bloomberg

Published: 6:15pm, 16 Apr 2021Updated: 6:15pm, 16 Apr 2021

China’s financial regulator said operations at China Huarong Asset Management are normal and the company has ample liquidity, marking the first outright comments seeking to ease investor concerns over the financial health of the nation’s largest distress-loan manager.

The company is actively cooperating with its auditor and will complete its annual report as soon as possible, the China Banking and Insurance Regulatory Commission said in a statement on its official WeChat account.

Silence from Huarong and regulators on the company’s plight have unnerved investors from Hong Kong to London who are seeking more details on its financial woes, its overhaul plan and the regulatory stance toward the fate of China’s largest state-owned distressed-loan manager.

Huarong, which is sitting on US$42 billion in debt, has roiled Asian credit markets since it failed to meet a March deadline for releasing its 2020 earnings. The company was already under a shadow after its former chairman, Lai Xiaomin, was executed earlier this year after being found guilty of bribery. Under his leadership, Huarong expanded into areas including securities trading and trusts in a significant shift away from the company’s original mandate of helping banks dispose of bad debt.

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China’s economy expands record 18.3 per cent in the first quarter of 2021

The company reiterated on Thursday it has “adequate” liquidity and has repaid all bonds that matured on time. It has funds for a full repayment of a S$600 million (US$450 million) offshore note due April 27, a person with direct knowledge of the company’s plan has said. Huarong’s onshore securities unit has wired funds to repay a local bond maturing Sunday, according to people familiar with the matter.

Bonds of the embattled bad-debt manager rebounded from record lows.

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