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China debt crunch

China Huarong announces state bailout alongside $16bn loss

Citic leads capital injection for distressed-debt manager

The pandemic and management woes have been a double whammy for Huarong.   © Reuters

SHANGHAI -- China Huarong Asset Management is set to receive a capital injection from a group of companies led by Citic Group, the state-owned bad-debt buyer said Wednesday, as it announced an estimated 102.9 billion yuan ($15.9 billion) net loss for 2020.

The embattled company cited a "decline of contract performance ability of certain customers" amid the coronavirus pandemic, which led Huarong to reassess asset risks and book large impairment losses. The liquidation of risky assets acquired under former Chairman Lai Xiaomin's aggressive expansion strategy also contributed to the massive loss.

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