China Cinda accelerates the disposal of nonperforming assets

China Cinda Asset Management Co accelerated the disposal of nonperforming assets through a variety of measures including debt restructuring, debt-to-equity swaps, and asset-backed securitization, to help China win the battle against financial risks.

The large State-owned asset management company has acquired the principal and interest of nonperforming financial assets totaling 742.5 billion yuan ($116.7 billion) since the 19th National Congress of the Communist Party of China was held in October 2017, said Zhang Weidong, president of Cinda.

The company also actively participated in the purchase of nonperforming assets of nonbank financial institutions, especially in the areas of trusts, financial leasing, and asset management plans.

Last year, it acquired nearly 10 billion yuan in creditor's rights transferred by trust companies and became the first purchaser of nonperforming assets of wealth management products issued by banks and also successfully disposed of such bad assets, said Zhang at a recent news conference held by the China Banking and Insurance Regulatory Commission.

At the same time, Cinda took part in some small and medium-sized financial institutions' reformations and efforts to defuse their risks through measures like restructuring advisory, purchases of nonperforming assets, and capital replenishment to help maintain regional financial stability.

In addition, the company initiated the establishment of a 10 billion yuan fund which invests in distressed companies. As of the end of 2021, 7.7 billion yuan of the fund had been invested in distressed companies in the machinery, iron and steel, pharmaceutical, chemical, and coal industries, Zhang said.

Cinda also helped many companies effectively lower leverage ratios to optimize their asset and liability structures. By the end of last year, it had carried out market-oriented debt-to-equity swaps totaling 26 billion yuan.

jiangxueqing@chinadaily.com.cn