China’s SOE restructuring gathers pace as Cofco Capital lines up new shareholders
The China Structural Reform Fund will inject 800 million yuan into a 6.9 billion yuan mixed-ownership restructuring programme
China’s Cofco Capital Investment is lining up seven strategic investors, attracting 6.90 billion yuan ($1.03 billion) of funds for its mixed-ownership reform that is aimed at boosting its competitiveness, according to state-owned asset-operating company, China Chengtong Holdings Group.
The China Structural Reform Fund Corp will inject 800 million yuan of capital and become the fifth largest shareholder in Cofco Capital. Other shareholders include Beijing Capital Agribusiness Group, Guangdong Wen’s Foodstuff, Shanghai International Group and other financial institutions.
“The combination of state-owned with private capital, and the agricultural industry with finance, will create a platform of harmony and cooperation, that will better serve the internationalisation of COFCO’s agriculture supply chain,” China Chengtong said in a statement.
China has called for the restructuring of state-owned enterprises to advance its supply side reforms, with the National Development and Reform Commission approving the third batch of state firms in a pilot scheme for rejuvenation with private capital through mixed-ownership.
Cofco Capital’s mixed-ownership reform comes ahead of China’s 19th party congress in autumn this year. The nation is at a critical juncture of its economic transition, confronting slowing growth and structural imbalances.
The combination of state-owned with private capital, and the agricultural industry with finance, will create a platform of harmony and cooperation, that will better serve the internationalisation of COFCO’s agriculture supply chain
China’s 102 central SOEs manage the bulk of the country’s state assets, but their monopolies have shut out smaller market entities and led to low efficiency and poor service.