Huarong AMC sells creditors' rights to Citigroup

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