China's Huarong Asset Management Corporation (Huarong AMC) announced Monday that its deal to sell two asset packages to Citigroup has been ratified by the State Development and Reform Commission (SDRC).

A spokesman for Huarong AMC said that the deal, involving a principal of 1.1 billion RMB yuan (133 million US dollars), is part of the company's second round international bidding for handling non-performing financial assets. It is the first time in China that non-performing creditors' rights have been bought with cash by a foreign investor.

Such a transaction has become possible only after the SDRC promulgated relevant policy measures at the end of last month, the spokesman said. In the past, a joint-venture was usually set up between Chinese AMCs and foreign investors to jointly handle non-performing assets.

The new policy measures simplified administrative procedures for AMCs to sell non-performing assets to foreign investors, helping to improve the market environment and foreign investors' confidence in buying non-performing assets from AMCs, he said.

Source: Xinhua