FILE PHOTO: The logo of China Huarong Asset Management Co is seen at its office in Beijing, China, April 16, 2021. REUTERS/Thomas Peter/File Photo
June 30, 2021
SHANGHAI (Reuters) -China Huarong Asset Management Co Ltd said it cannot determine when it will publish its 2020 financial results, and proposed delaying its annual shareholder meeting, injecting fresh uncertainty into China’s biggest bad-debt manager.
Huarong, in filings to the Hong Kong stock exchange late on Tuesday, also announced plans to sell stakes in a distressed asset exchange unit.
The firm, whose shares have been suspended from trade since April 1, said operations are normal and that it has been providing relevant information to auditors.
“However, given that the relevant transaction of the Company has not been finalised, neither the Company nor the Auditor is currently able to estimate the time required for completion of the 2020 Annual Results or to finalise the expected timetable for the publication,” it said, without disclosing the transaction.
As 2020 audit work has not been finished, the board has proposed postponing the firm’s 2020 annual general meeting, Huarong said.
Huarong missed the March 31 deadline for filing its 2020 earnings, sparking a rout in its U.S. dollar-denominated bonds that spread to other issuers, amid concern that a default could leave foreign investors losing out.
Its bonds were little changed on Wednesday, Refinitiv data showed. The mid price on its 3.8% Singapore dollar-denominated bond maturing in November 2025 was last quoted at 66.545, versus 66.494 on Tuesday.
Huarong, which counts China’s finance ministry as its biggest shareholder, has been hurt by failed investment, aggressive expansion and a corruption case that culminated in the execution of its former chairman, Lai Xiaomin.
In a separate statement late on Tuesday, Huarong said auditors “will need more information and time” and that the delay does not constitute an event of default.
Huarong also said it “has been conducting its business operation on a normal basis. No material change has been found in the Group’s business operation” since April 1, when trading of its shares was suspended.
The firm, without elaborating, said it intends to sell its 79.6% stake in Huarong Zhongguancun Distressed Asset Exchange Centre Co.
The sale comes as regulators push Huarong to sell non-core assets as part of a revamp, Reuters reported.
The company has also officially nominated Liang Qiang as president and executive director of its board, showed a separate exchange filing.
(Reporting by Andrew Galbraith and Emily Chow; Additional reporting by Samuel Shen and Cheng Leng; Editing by Christopher Cushing)
