Caixin
Jun 17, 2021 09:20 AM
CX DAILY

CX Daily: Embattled Huarong to Sell Multibillion-Dollar Assets as Rescue Plan Gets Underway

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Huarong /

Exclusive: Embattled Huarong to sell multibillion-dollar assets as rescue plan gets underway

Debt-ridden China Huarong Asset Management Co. Ltd. is attempting to raise cash by selling its stakes in seven units as part of a restructuring to help repay billions of yuan of bonds and reduce the financial risks accumulated from years of corruption and bad investments.

The assets to be offloaded are holdings in five financial units including a regional lender, a nonperforming assets trading company and a regional asset management company (AMC), sources with knowledge of the matter told Caixin. The seven companies hold a combined 700 billion yuan ($109 billion) in total assets.

Related: Huarong faces MSCI index removal as stock halt enters 50th day

Banking /

Exclusive: Banks prepare to lower deposit rates as rate cap overhaul takes effect

Multiple banks in China are getting ready to reduce how much interest they offer on deposits, taking advantage of a restructuring that encourages them to lower the cap on deposit rates, sources with knowledge of the matter told Caixin.

Under the change, banks will set the upper limit on deposit interest rates by adding a certain number of basis points to the central bank’s benchmark deposit rates, rather than multiplying the benchmark rates by a specific number, Caixin previously reported. A self-regulatory organization backed by the central bank approved the new regime at an internal meeting earlier this month.

FINANCE & ECONOMY

Pork /

China’s plummeting hog prices trigger new mechanism that may lead to state buying

A slump in live hog prices in China, the world’s largest producer and consumer of pork, triggered a new government early warning system that if the slide continues could lead to state buying to prop up the market, according to the nation’s top economic planner.

The National Development and Reform Commission (NDRC) issued a statement (link in Chinese) Wednesday saying that price drops last week amid surging supply, frozen imports and weak seasonal demand triggered a so-called “level-three warning,” which serves as the first of a new three-tier system that involves use of strategic pork reserves to stabilize the market.

Securities /

Everbright Securities sues Italian businessmen over failed British deal

Chinese state-owned brokerage Everbright Securities Co. Ltd. sued the two Italian former owners of defunct British sports media company MP & Silva (MPS) alleging fraudulent misrepresentation and breach of tax commitments.

The company’s Everbright Capital Investment Co. Ltd. unit and Everbright Capital’s overseas investment vehicle Jinxin Inc. filed suit in London’s High Court of England and Wales seeking $661 million (4.2 billion yuan) in damages. Everbright is trying to claw back some of the significant losses incurred by its ill-fated 2016 acquisition of MPS.

Debt /

Indebted China Oceanwide’s shares in listed arm auctioned by court

Chinese real estate developer Oceanwide Holdings Co. Ltd. faces major shareholding changes after part of its equity was put up for judicial sale by its indebted controlling shareholder.

A total of 294 million of Oceanwide Holdings shares were auctioned between Monday and Tuesday, records from a judicial auction platform run by Alibaba Group showed. The equity, originally held by biggest shareholder China Oceanwide Holdings Group Co. Ltd. (China Oceanwide), accounted for 3.39% of Oceanwide Holdings.

Virtual banks /

Chart of the Day: Hong Kong’s new virtual banks bled cash last year

Hong Kong’s eight virtual banks all lost money last year, with a combined pretax loss of HK$2.4 billion ($309 million), according to a report published Tuesday.

Standard Chartered-backed Mox Bank reported the largest loss at HK$456 million, followed by Livi Bank at HK$438 million. Ant Bank (Hong Kong), the virtual banking arm of Ant Group Co. Ltd., lost the least at HK$172 million, based on data compiled by consulting giant KPMG.

Quick hits /

Hong Kong exchange may join the SPAC parade

Fisher: Broader indexes offer better stock portfolio benchmarks

Opinion: China’s digital yuan wallet designed to meet everyone’s needs

BUSINESS & TECH

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It’s not the first time Shein has been accused of copying designs and selling them at lower prices, a persistent problem in the fast fashion industry. Photo: Shein.com

Fast fashion /

Maker of Dr. Martens boots sues Chinese fast fashion upstart Shein

The British footwear giant behind Dr. Martens boots is suing Chinese fast-fashion unicorn Shein for intellectual property theft as scrutiny of the notoriously media-shy company grows.

AirWair International Ltd. filed a lawsuit in California against Shein’s parent company, Hong Kong-based Zoetop Business Co. Ltd., accusing it of ripping off their designs for the workers’-boot-turned-luxury-footwear. The parties are thought to be in mediation.

The case shows how Shein, the export-only clothing platform that has been described as an "H&M killer," is receiving new attention as questions swirl about its business ahead of a rumored IPO.

Nuclear /

China says there’s no radiation leak at Taishan nuclear plant

China’s Ministry of Environment and Ecology denied media reports of a possible leak at a nuclear power plant in southern China’s Guangdong province, saying that nothing out of the ordinary has been detected.

The ministry said radiological indicators in the vicinity of Taishan nuclear plant remain at “background level” and that “no leak of any kind” occurred, according to a statement issued Wednesday.

On Sunday, CNN reported that the U.S. government spent the past week assessing a report of a leak at the Taishan plant, after Framatome, its French part-owner and operator, warned of an “imminent radiological threat.”

Space station /

China set to launch three astronauts into space Thursday

China plans to launch its Shenzhou-12 spacecraft Thursday morning to carry three astronauts to its space station in orbit, the China Manned Space Engineering Office (CMSEO) said Wednesday at a press conference.

The spacecraft is scheduled to blast off at 9:22 a.m. from the Jiuquan Satellite Launch Center in North China’s Inner Mongolia autonomous region, said Ji Qiming, assistant to the director of the CMSEO.

Suning /

Debt-riddled Suning gets nod to postpone $656.5 million bond repayment

Chinese retailing giant Suning received approval from the holders of its 4.2 billion yuan ($656.5 million) of five-year bonds to delay repayment amid increasingly desperate plans to claw its way out of mounting debt, including turfing out employees from purpose-built apartments in the hope of selling the properties.

The bonds, issued by Suning Appliance Group Co. Ltd., an affiliate of Suning Holdings Group, was due Wednesday, but repayment was postponed for two years, according to a company filing with the Shenzhen Stock Exchange seen by Caixin. The bond’s coupon rate is 6.5%.

Quick hits /

Chinese lithium producer to invest in Mali mine

Huawei quietly powers up chipmaking investments

China-backed overseas coal projects scuttled at growing rate

Energy Insider /

Energy Insider: South China nuclear plant denies leak reports; 25 people killed in Hubei gas explosion

Hot Topics /

China boosts oversight over extracurricular education, livestreamers face prison for selling fake goods

U.S. supermarket cashier shot dead, Covid-19 spreading faster than vaccine distribution, India lifts New Delhi lockdown

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Today's CX Daily was compiled and edited by Kevin Guo (xinguo@caixin.com).

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