Proposed to sell 28.9 billion debt at a 40% discount, CBHB intends to lighten its load
CBHB plans to sell its debt assets at a price not less than 17.672 billion yuan, equivalent to about 60% of the total amount. This is aimed at improving capital adequacy and enhancing liquidity. An impairment provision of approximately 7.415 billion yuan has been made, with a net debt amount of around 21.55 billion yuan. As of December 31, 2023, the assets to be transferred incurred an annual post-tax net loss of 1.188 billion yuan. The proceeds from the sale will be used for general operating funds to enhance asset quality and liquidity. Potential buyers include China Cinda, China Orient, China Great Wall Asset Management, China CITIC Financial Assets, Tianjin Jinrong Asset Management, and Tianjin Binhai Zhengxin Asset Management
CBHB recently announced that it plans to sell its debt assets for no less than RMB 17.672 billion.
The price is equivalent to approximately 60% of the total debt assets to be transferred as of December 31, 2023, which is RMB 28.965 billion.
The assets to be transferred include debt assets legally owned by CBHB. As of December 31, 2023, the principal amount of the assets to be transferred is approximately RMB 25.605 billion, the total interest amount is approximately RMB 2.035 billion, the total penalty interest amount is approximately RMB 1.3 billion, and the total advance judicial expenses amount is approximately RMB 0.25 billion, with a total debt amount of approximately RMB 28.965 billion.
Among them, the provision for asset impairment already made is approximately RMB 7.415 billion and has been included in CBHB's audited financial statements as of December 31, 2023. Therefore, the net debt amount excluding the provision for impairment as of December 31, 2023, is approximately RMB 21.55 billion.
According to the announcement, the negative financial impact on CBHB from the above price (selling debt for no less than RMB 17.672 billion) minus the net debt amount excluding the provision for impairment is approximately RMB 3.878 billion.
Furthermore, the announcement also mentioned the specific situation of the transferred assets. As of December 31, 2023, CBHB's annual after-tax net loss was RMB 1.188 billion; as of December 31, 2022, the annual after-tax net loss was RMB 2.121 billion.
The potential transferees involved in this asset transfer include China Cinda Tianjin Branch, China Oriental Tianjin Branch, China Great Wall Asset Tianjin Branch, China CITIC Financial Asset Tianjin Branch, Tianjin Jinrong Asset Management Co., Ltd., and Tianjin Binhai Zhengxin Asset Management Co., Ltd., among others.
CBHB stated that the proceeds from the sale are intended for general operating funds, to enhance its asset quality, reduce capital occupation, thereby improving capital adequacy ratio and enhancing liquidity