China Huarong sells 70% of its consumer credit unit to Bank of Ningbo

Prosecutors outline the financial case of the campaign against Lev Parnas as the criminal trial begins

Huarong and Bank of Ningbo reached an equity transfer deal on Dec. 27, and it is still subject to regulatory approval, it said.

After the completion of the deal, Huarong Consumer Finance, the unit, will no longer be a subsidiary of the group, according to a statement filed to Hong Kong Stock Exchange.

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The bonds then rose in August after it revealed a state-backed rescue plan, under which a consortium led by the state-owned Citic Group Corp (CITIC.UL) agreed to make a strategic investment in it.

Huarong, one of four debt collectors created by China’s finance ministry in 1999 to process bad loans made by the country’s biggest banks, had missed a March 31 deadline for filing its 2020 earnings, sparking a rout in its U.S. dollar-denominated bonds that spread to other Chinese issuers.

The state consortium will help it secure fresh capital worth 42 billion yuan, the company said last month. read more

Besides the consumer finance unit, Huarong has announced similar plans to sell stakes in a distressed asset exchange unit and the securities unit, amid a regulatory push to sell non-core assets as part of its business restructuring, Reuters has reported. read more

Last month, Huarong was granted approval to raise 70 billion yuan of financial bonds in the interbank market, as it continues to improve its credit profile and re-focus on its main bad loan business. read more ($1 = 6.3718 Chinese yuan renminbi)

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Reporting by Cheng Leng and Ryan Woo; Editing by Kirsten Donovan Our Standards: The Thomson Reuters Trust Principles.