Chinese defaulter Huarong confirms annual loss of $16 billion

China’s top manager of distressed assets, China Huarong Asset Management Co., confirmed it had suffered a net loss of about $16 billion last year, and warned investors that it was not meeting regulatory requirements regarding financial strength.

The publication of the 2020 results is an important step in the rehabilitation of Huarong. The company, a major borrower in international bond markets, had misled global investors earlier this year after it delayed the release of its full-year results.

The figures, released late Sunday in Hong Kong time, showed that Huarong made a net loss of about 103 billion yuan last year, equivalent to $15.9 billion, as it suffered massive write-downs on its assets. Those impairments were equivalent to $16.7 billion.

Huarong, which is majority-owned by China’s finance ministry, warned on Aug. 18 of a net loss of about $16 billion for 2020. It also said it planned to inject capital from five state-owned companies. institutions and reassured bond investors that it has no plans to restructure its debt.

In a separate set of results for the six months through June 30, also released on Sunday, Huarong said it had failed to meet minimum regulatory requirements for certain financial measures, such as capital adequacy and leverage ratios.

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