|Management of Entrusted Distressed Assets|
Policy-oriented DES business
In 1999, the company implemented the decisions of the CPC Central Committee and the State Council by conducting DES business to state-owned enterprises (SOEs), which solved distressed assets of commercial banks, defused and prevented financial risks. By DES business China Huarong helped these companies to reduce financial burdens, establish modern enterprise systems, enhance corporate governance and promote reform of SOEs. After stock conversion, China Huarong realized the appreciation of equity value and improved liquidity of DES assets through equity swap, restructuring and listing of DES companies, and gained investment revenue from equity disposal and dividend income.
Market-oriented DES business
In order to implement the supply-side structural reform and focus on the Central Government decision and deployment of “cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness”, China Huarong adopted the principles of market-orientation and the rule of law to DES investment for enterprises, help them to optimize financing structure, ease liquidity pressure, reduce financial burden which enable enterprises to develop with less burden and increased efficiency.
Market-oriented DES investment includes but not limited to:
1. Increase capital to the target enterprise or its affiliated parties in the form of equity investments, and the increased capital is to be used exclusively to repay debts of the parent company or its subsidiaries.
2. Directly acquire creditor’s rights of target enterprises from creditors and convert them into equity contributions.
The form of investments includes common stock, preferred stock, convertible bond, exchangeable bond, etc.
Huarong Ruitong Equity Investment Management Co., Ltd.
The Group conducts its DES business through Huarong Ruitong Equity Investment Management Co., Ltd. (“Huarong Ruitong”). Huarong Ruitong was founded on January 18, 2017 with a registered capital of RMB 300 million. It is a wholly-owned subsidiary of China Huarong. Huarong Ruitong serves as an important strategic platform for China Huarong to conduct its DES business with market approach. Huarong Ruitong takes dual responsibilities, DES management of the Group while conducting its own equity investment business. Huarong Ruitong plays its unique institutional advantage and focuses on market-oriented DES and equity investment business.
Address：6/F, No. 8 Financial Street, Xicheng District, Beijing
TEL：+86 10 59618585