China Huarong Asset Management Corporation (CHAMC), the country's biggest asset management corporation, sold all its debtor company's temporary shares to the Xinjiang Guanghui (Group) at a price 5 percent higher than Huarong's purchase price.

"The transfer is a success for Huarong, for it realized the maximum recovery of state assets and at the same time provided opportunities for private firms," a spokesman for the company said.

"Moreover, it is successful in the sense that Huarong sold its seemingly bad assets at a price higher than the purchase price," he noted.

Huarong purchased 115 million yuan in shares from the Xinjiang Shiyue Tractor Manufacturing Co. Ltd, which was operating at a loss, to help it complete the debt-to-equity swap this year, as a means to recover state assets and revive some key state-owned enterprises.

Xinjiang Shiyue Tractor Manufacturing Co. Ltd is the country's largest tractor producer in the western areas and one of pillar enterprises for the industry.

But for various reasons, the tractor company started making losses in recent years. After the swap, the company's debt-to- asset ratio was down from 79 percent to 52 percent and it showed a sign of recovery.

The potential value generation capacity of the company attracted the Xinjiang Guanghui (Group), which plans to inject 200 million yuan to back the company's technological upgrading.

China's regulation on asset management corporation stipulates that the creditor's rights or shareholding rights held by these corporations can either be transferred to domestic and foreign investors or can be sold back to the debtor company after it got listed.

Huarong has collected 860 million yuan in cash for its non-performing loans by the end of November, the spokesman disclosed.

(Xinhua 12/13/2000)