BEIJING, Jan 5 — Shares in China’s state-owned debt collector Huarong Asset Management plummeted 50 per cent today as trading resumed in Hong Kong after a US$6.6 billion state-orchestrated bailout of the embattled company.
When Huarong published its results in August, it revealed a record US$15.9 billion loss for 2020 and outlined a rescue plan.The plunge follows a filing late yesterday in which Huarong said it would return to its core business, adjust its structure, cut capital consumption and boost returns.Huarong has also completed a recapitalisation of 42 billion yuan from a group of state-backed investors, and started disposals of assets.
Fitch added that “near-term asset risk at its core business and leverage will stay elevated due to its weak asset quality and business nature”.