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China debt crunch

China Huarong falls 50% as trading resumes after nine-month halt

Shares of one of four state-owned distressed-debt managers hit record low

Huarong Asset Management's offices in Beijing. The resumption of trading in its shares on Jan. 5 followed Huarong's announcement in November that it would receive fresh capital from a state consortium as part of a restructuring plan.   © Reuters

HONG KONG (Reuters) -- Shares of China Huarong Asset Management Co plunged as much as 50% in Hong Kong on Wednesday to a record low, as trading resumed after a nine-month suspension, giving investors the chance to revalue the embattled company.

Shares were last trading at HK$0.52 ($0.067), the lowest since the company debuted in October 2015.

Huarong, one of four state-owned distressed-debt managers, halted trading in its shares in April 2021 after missing a March 31 deadline for filing its 2020 earnings, sparking a rout in its U.S. dollar-denominated bonds that spread to other Chinese issuers.

In August, Huarong, which counts China's finance ministry as its largest shareholder, announced a first-half 2021 profit of 158.3 million yuan ($24.5 million) and a nearly $16 billion loss for 2020.

Wednesday's share trading resumption follows Huarong's announcement in November that it would receive fresh capital worth 42 billion yuan ($6.59 billion) from a state consortium led by Citic Group as part of a restructuring plan.

Huarong has also announced a slew of asset divestment deals, including stake sales in its consumer finance, securities and distressed asset exchange businesses, amid a regulatory push to sell non-core assets in its business revamp.

The company said it applied to resume trading as the resumption guidance had been fulfilled, including the disclosure of all material information on its business, financial performance and operation in its results.

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