CIC Checks the Books for Potential Purchase of Stakes in National Bad Banks
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China's sovereign wealth fund, China Investment Corp. (CIC), has begun due diligence on the potential acquisition of three of the country’s largest bad debt managers, Caixin has learned.
In early September, CIC dispatched teams to two national asset management companies (AMC) — China Cinda Asset Management Co. Ltd. and China Orient Asset Management Co. Ltd. — to assess their business and financial conditions, in preparation for acquiring a majority stake in both companies from the Ministry of Finance, people familiar with the matter told Caixin. The studies are still underway.
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- China's sovereign wealth fund, China Investment Corp. (CIC), is conducting due diligence on acquiring major stakes in China Cinda, China Orient, and China Great Wall asset management companies (AMCs) from the Ministry of Finance.
- China International Capital Corp. Ltd. is providing investment banking services for this equity transfer, with the Ministry of Finance retaining some management roles post-transfer.
- The equity transfer is part of broader financial reforms, aiming to separate regulatory functions from operational roles within the AMCs, amidst financial challenges due to a real estate downturn.
- Late 1990s：
- China created the four asset management companies (China Cinda, China Orient, China Great Wall, and China Huarong).
- 2018：
- Lai Xiaomin came under investigation for corruption.
- 2021：
- Huarong was bailed out in a state-led rescue plan spearheaded by Citic Group Corp.
- January 2024：
- Huarong was renamed China Citic Financial Asset Management Co. Ltd. after restructuring.
- August 2024：
- CIC completed a similar due diligence review of China Great Wall Asset Management Co. Ltd.
- In early September 2024：
- CIC dispatched teams to China Cinda Asset Management Co. Ltd. and China Orient Asset Management Co. Ltd. to assess their business and financial conditions.
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