China Construction Bank Corp. proposed to set up an asset management unit specializing in debt-to-equity swap business.
CCB Asset Management Co. Ltd. will be established with a proposed registered capital of 12 billion yuan. The proposal is subject to regulatory approval. The unit will operate as a tier-1 subsidiary of the bank.
The unit will specialize in market-driven debt-to-equity swap business and will mainly conduct financial business such as acquisition of relevant debt rights, equity investment, converting debt into equity, and managing and disposing equity in debt-to-equity swap enterprises, among others.
The announcement came after Caixin reported in November that the five biggest state-owned banks in China, including China Construction Bank, are considering setting up their own asset management firms to swap problem loans for equity stakes in corporate borrowers.
As of Dec. 19, US$1 was equivalent to 6.95 Chinese yuan.