A consortium led by international investment bank Morgan Stanley has
resubmitted its application to set up a joint venture to dispose of
distressed state-owned enterprise assets, after making changes to its
initial plan, the Financial Times said. The consortium agreed last
November to buy non-performing loans with a face value of US$1.3bn in a
venture with Huarong, an asset management company attached to the
Industrial and Commercial Bank of China. To avoid problems that might
be caused by the lack a defined legal status for joint ventures that
exercise rights over securities or repatriate currency, Morgan Stanley
has proposed setting up a two-tiered structure ?a joint venture company
that will own the debts and offshore entity that charges fees for
disposing of them.
Each of China's big four state-owned commercial banks has an asset
management company attached to it to take over its bad debts. Since the
system was set up in 1999, the companies have disposed of about 15 per
cent of their total portfolio of Yn1,400bn bad assets.
Disclosure rules violated Shanghai Stock Exchange has reprimanded two
companies, Chongqing Three Gorges Water Conservancy and Electric Power
and Dongxin Electrical Carbon, for failing to disclose loan guarantees
within prescribed period, Bloomberg reported. The reprimands have been
placed on record and may affect future share sales. Three Gorges
guaranteed payment on bank loans totalling Yn292m for subsidiaries last
year, but did not disclose the information until August this year.
Dongxin had failed to disclose US$20m in loan guarantees.