China state firms draw up plans to deleverage, cut debt ratios - paper
SHANGHAI, July 13 (Reuters) - Six of China's biggest
state-owned firms have drawn up plans to reduce debt and
leverage in the coming two years, state media said on Friday,
part of the country's efforts to rejuvenate the debt-ridden
China began a new round of reforms in 2016 aimed at
streamlining its lumbering state-owned enterprises (SOEs) by
introducing private capital, curbing overcapacity, shutting down
"zombie" subsidiaries and restructuring assets. It has already
cut the total number of companies under central government
control to 96, down from 117 in 2012.
The official China Securities Journal said on Friday that
the six firms - including the country's biggest refiner, the
Sinopec Group - have already finished drawing up
their debt-reduction plans and have submitted them to the
regulator, the State Asset Supervision and Administration
Two of China's big state power groups, Huaneng and Huadian,
as well as the China Railway Construction Corporation
, the China State Construction Engineering Corp
and the China Merchants Group, are also among the
six pilot enterprises, it said, adding that SASAC itself was
also preparing to release its "work plan" to control debt ratios
at the 96 firms now under its jurisdiction.
The 96 companies are under political pressure to cut debt to
asset ratios by an average of 2 percentage points by 2020.
SASAC chairman Xiao Yaqing told a meeting of executives
earlier this month that firms needed to adjust investment
structures, slash excess capacity and improve cash flow
management in order to achieve the goal.
Debt to asset ratios among central government enterprises
stood at an average of 66 percent by the end of June, down 0.3
percentage points since the beginning of the year, SASAC said at
a Thursday briefing. The figure still amounts to about 36
trillion yuan ($5.4 trillion).
($1 = 6.6687 yuan)
(Reporting by David Stanway; Editing by Sam Holmes)
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