Caixin
Jun 24, 2021 07:20 PM
FINANCE

Bad-Asset Manager Huarong Repays $250 Million Bond as Default Worries Persist

What’s new: An offshore financing arm of bad-debt manager China Huarong Asset Management Co. Ltd. has repaid another maturing dollar bond on time, amid mounting concerns about the company’s financial health.

On Wednesday, China Huarong International Holdings Ltd. repaid the $250 million bond due the same day, the company said in an annoucement published on its WeChat account (link in Chinese).

Huarong International said that since April, it had redeemed three U.S. dollar bonds and one Singapore dollar bond in full and on schedule, totaling $1.45 billion and S$600 million ($446 million), respectively.

The company said it has been making debt repayments “diligently,” adding that its liquidity was “normal” and operations were “continuously improving.”

The background: Concerns have been growing over Huarong’s ability to repay debt. Controlled by the Ministry of Finance and the largest of China’s Big Four asset management companies by total assets, it missed two official deadlines to publish its 2020 results, triggering steep sell-offs in its offshore bonds.

Currently, Huarong and its subsidiaries have more than $20 billion of outstanding offshore bonds, according to Bloomberg data.

The company was already cast in an unfavorable light following the downfall of its former Chairman Lai Xiaomin in April 2018. Lai was executed in January for crimes including bribery and embezzlement of public funds.

As part of a restructuring, Huarong is attempting to raise cash by selling its stakes in seven companies, Caixin recently revealed.

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and editor Lin Jinbing (jinbinglin@caixin.com)

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