Citic Group has paid RMB 12 billion ($1.65 billion) for a 60% stake in China Huarong Financial Leasing from China Citic Financial Asset Management, reports Caixin. The transaction aims to help China Citic Financial Asset Management divest itself of non-core financial assets to focus on its core business, the company said in a statement Tuesday.
Formerly China Huarong Asset Management, China Citic Financial Asset Management was created after Citic Group led a bailout of China Huarong in 2021 to prevent the bad debt company from defaulting on billions of dollars of offshore bonds.
Established in 1999, Huarong was one of four state-owned asset management companies created to dispose of trillions of yuan of nonperforming assets held by China’s “Big Four” state banks. They were tasked with buying up distressed debts and recouping as much money as possible by selling or restructuring the assets or using other means to extract value from them.