May 30, 2024 05:48 AM
FINANCE
Citic Group Buys 60% Stake in China Huarong Financial Leasing for $1.65 Billion
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China Huarong changed its name to China Citic Financial Asset Management in January.
Citic Group Corp. agreed to acquire a 60% stake in China Huarong Financial Leasing Co. Ltd. from China Citic Financial Asset Management Co. Ltd. for 12 billion yuan ($1.65 billion).
The transaction aims to help China Citic Financial Asset Management to divest of non-core financial assets to focus on its core business, the company said in a statement Tuesday.
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- Citic Group Corp. agreed to acquire a 60% stake in China Huarong Financial Leasing Co. Ltd. for 12 billion yuan ($1.65 billion).
- China Citic Financial Asset Management is divesting non-core assets after a 2021 bailout to manage debts; it was formerly China Huarong Asset Management.
- China Huarong Financial Leasing reported a net profit decline to 158 million yuan in 2023, and overlaps with Citic Group’s financial leasing unit, prompting future industry competition measures.
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Who’s Who
- Citic Group Corp.
- Citic Group Corp. agreed to acquire a 60% stake in China Huarong Financial Leasing Co. Ltd. from China Citic Financial Asset Management Co. Ltd. for 12 billion yuan ($1.65 billion). The acquisition aims to help focus on core business. Citic Group led a bailout of China Huarong in 2021, which was renamed China Citic Financial Asset Management. Measures will be taken to address competition within five years.
- China Huarong Financial Leasing Co. Ltd.
- China Huarong Financial Leasing Co. Ltd. is one of China's earliest financial leasing companies. As of the end of 2023, it had net assets of 19.7 billion yuan and reported a net profit of 158 million yuan, down from 1.2 billion yuan in 2022. Its business overlaps with Citic Group's financial leasing unit.
- China Citic Financial Asset Management Co. Ltd.
- China Citic Financial Asset Management Co. Ltd., formerly known as China Huarong Asset Management Co. Ltd., was created after Citic Group led a bailout in 2021 to prevent Huarong from defaulting on offshore bonds. It changed its name in January and holds assets from 33 former Huarong subsidiaries. The company is offloading stakes in these subsidiaries to help repay Huarong’s debts, focusing on divesting non-core financial assets to concentrate on its core business.
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What Happened When
- 2018：
- Lai Xiaomin, the former chairman of Huarong, came under investigation for graft.
- January 2021：
- Lai Xiaomin was executed for taking bribes, bigamy, and embezzlement.
- 2021：
- Citic Group led a bailout of China Huarong to prevent the company from defaulting on offshore bonds.
- January 2022：
- China Huarong changed its name to China Citic Financial Asset Management.
- 2023：
- China Huarong Financial Leasing reported a net profit of 158 million yuan, down from 1.2 billion yuan in 2022.
- By the end of 2023：
- China Huarong Financial Leasing had net assets of 19.7 billion yuan.
- Tuesday, May 28, 2024：
- Citic Group Corp. agreed to acquire a 60% stake in China Huarong Financial Leasing for 12 billion yuan.
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