China Great Wall Asset Management Begins Operation as Stock Corporation
(Beijing) — China Great Wall Asset Management Co. Ltd. — one of the country's four asset management companies established to handle bad loans incurred at state-owned banks — officially launched as a stock corporation on Sunday after changing its corporate structure in preparation for an initial public offering.
Great Wall was set up by the Ministry of Finance in 1999 to buy up bad debts from banks and recover as much money as possible by selling and restructuring the non-performing assets. It was officially transformed into a stock corporation on Nov. 25 by the Finance Ministry, the National Council for Social Security Fund (NCSSF) and China Life Insurance with a registered capital of 43.15 billion yuan ($6.25 billion).
The Ministry of Finance holds 97% of the equity stakes, while the NCSSF and China Life acquired 2% and 1% respectively.
By the end of September, the non-performing loans in China's banking sector had swollen to 1.49 trillion yuan, with an NPL ratio of 1.76%, up from 1.44 trillion yuan a quarter earlier, according to the country's top banking industry regulatory authority.
By issuing additional shares, the company will have five to eight more investors by the end of the third quarter or the end of 2017. These are expected to be not just financial institutions, both domestic and foreign, but also state-owned and privately owned Chinese enterprises, said Zhang Shixue, chief manager of Great Wall Asset Management's strategic development department. Since last year, Great Wall Asset Management has been in talks with nearly 80 strategic investors.
"After having strategic investors on board, we will start the preliminary preparation for an IPO," Zhang said.
Unlike China Orient Asset Management, which has changed its corporate ownership structure and plans to list in Hong Kong, Great Wall Asset Management zeros in on a dual-listing both on the mainland and Hong Kong. Previously, China Cinda Asset Management and China Huarong Asset Management went public in Hong Kong in 2013 and 2015 respectively.
Great Wall Asset Management now has 11 subsidiaries in such sectors as banking, securities and trust. By the end of November, its assets under management were valued at 644.7 billion yuan, with net assets at 56.9 billion yuan.
Contact reporter Dong Tongjian (firstname.lastname@example.org)
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