Moody’s Investors Service downgraded China Evergrande Group’s credit rating by one notch to B2, the second downgrade by a global ratings agency in less than two weeks, Bloomberg News reported. Concern has been building over the troubled Shenzhen-based developer, which on Wednesday tried to reassure investors about its financial health, saying it has reduced its net debt-to-equity ratio to below 100%, as required by Chinese regulators. Evergrande has also said it pared total borrowings to about 570 billion yuan ($88 billion) from 717 billion yuan in December.
Read more
China
A consortium led by Alibaba Group Holding Ltd. and the Jiangsu provincial government are nearing a deal to buy a stake in the retail arm of Chinese billionaire Zhang Jindong’s Suning empire, according to people familiar with the matter, the latest domino to fall in Beijing’s effort to clean up its heavily indebted conglomerates, Bloomberg News reported. The unit, Suning.com Co., could make an announcement as soon as this week.
Read more
Shen Tiedong has been named as chairman of Huachen Group, parent of BMW’s China partner Brilliance Auto, according to a Brilliance Auto wechat post on Monday, Reuters reported. Huachen is standing on the brink of bankruptcy, defaulting on billions of yuan in debt obligations. Chinese regulators have launched an investigation into possible violations of disclosure laws by the company. Brilliance makes vehicles with BMW in the northeastern Chinese city of Shenyang. It also has a joint venture with Renault SA. Yan Bingzhe, Huachen’s former chairman, will step down, the post said.
Read more
China has asked one of its biggest state-owned conglomerates to examine the finances of China Huarong Asset Management Co., adding a new twist to the drama that has roiled the world’s second-largest credit market for months, Bloomberg News reported. Citic Group, whose businesses span everything from banking to securities and mining, recently dispatched a team to Huarong to pore over the embattled distressed-debt manager’s books. It couldn’t immediately be determined what, if anything, might result from Citic Group’s involvement.
China’s central bank increased its short-term cash injection for the first time since March as it moved to soothe market concerns about liquidity conditions ahead of the quarter-end, Reuters reported. The injection of 30 billion yuan ($4.6 billion) marked an end to the People’s Bank of China’s practice of adding 10 billion yuan each trading day for the past three months. The move bodes well for liquidity prospects in the second half, as some 4.15 trillion yuan of medium-term policy loans will mature by December.
The vice mayor of Tianjin told financial institutions on Tuesday he expected no additional state companies to default in the northern Chinese city and promised to maintain a healthy credit environment, three sources told Reuters. Since late 2020, several defaults by state firms including Yongcheng Coal & Electricity Holding Group Co., Tsinghua Unigroup Ltd and automaker Huachen Automotive Group have eroded investor confidence, pushing up corporate funding costs.
Read more
The owners of Suning.com plan to sell more shares held in the debt-ridden Chinese retail group, it was announced Wednesday, a sale that puts founder and Chairman Zhang Jindong's control over the company into question, Nikkei Asia reported. Zhang and entities under his control will sell a portion of their shares in Suning. The buyers and the percentage stake involved have not been disclosed. This move comes after Zhang and other shareholders decided in March to sell a 23% stake in Suning to a group of state-owned investors for 14.8 billion yuan ($2.28 billion at current rates).
Read more
Borgward will file for bankruptcy, which will be announced at the beginning of July, Sina Tech reported today, according to Gasgoo.com. In 2014, BAIC Foton acquired the iconic German brand and in March, 2019, Ucar, a chauffeured car service provider in China, bought 67% stake of the company with 4.109 billion yuan. Many former employees of Borgward revealed that in order to help Borgward enter into high-end vehicle market, Foton has been marketing Borgward as a brand with German origin, but its heavy investment seems to be a failure.
China's central bank said on Monday it had recently summoned some banks and payment firms, including China Construction Bank and Alipay, urging them to crack down harder on cryptocurrency trading, Reuters reported. The People's Bank of China's meeting came after China's State Council, or cabinet, last month said that it would tighten restrictions on bitcoin trading and mining. Beijing has sharply ratcheted up its campaign in the last few weeks.
Read more
The Federal Communications Commission on Thursday proposed further restrictions on purchases of telecommunications equipment that pose national security risks, strengthening its opposition to Chinese providers of 5G wireless and other technologies, the New York Times reported. The F.C.C. voted unanimously to explore the proposal to ban U.S. companies from all future purchases of telecommunications equipment from companies like Huawei and ZTE of China.
Read more