State-owned insurance company China Life Insurance has bought 1.96 billion newly-minted Hong Kong-listed shares in Huarong Asset Management as part of a government-sponsored plan to save the indebted bad-asset manager, reports Caixin. The insurer now controls 7.29% of Huarong’s Hong Kong-listed shares after the purchase on November 17.
The purchase happened on the same day that Huarong reached deals with five strategic and financial investors, including China Life, to sell them newly issued shares worth RMB 42 billion ($6.6 billion). If all the deals go through, China Life will control a 2.44% stake in Huarong.
The investors’ cash injection, first announced in August, is part of a rescue package for state-owned Huarong. The company reported a net loss of RMB 102.9 billion in 2020 and had borrowings of RMB 782 billion at the end of June this year, with RMB 578 billion of the total due within a year.
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