The domestic investment arm of China’s sovereign wealth fund has been given the green light to raise 80 billion yuan (11.7 billion dollars) through a bond issue, state media reported Wednesday.
Central Huijin Investment Ltd will inject the proceeds into state-run commercial banks to help shore up their capital base after massive lending last year, the China Daily said. The rest of the funds will be pumped into the Export-Import Bank of China and the Credit Insurance Group, which are tasked with supporting the country’s export sector, the newspaper said, citing unnamed sources.
Huijin is an investment arm of China Investment Corp, the country’s 300-million-dollar sovereign wealth fund, and was set up to invest in key state-owned financial institutions. Officials at Huijin were not immediately available to comment while CIC declined to respond when contacted by AFP.
The report did not give a date for the bond issue approved by the State Council, or cabinet, or how the proceeds would be carved up. Chinese lenders have been ordered to increase their capital base after new loans nearly doubled to 9.6 trillion yuan in 2009 as they heeded Beijing’s calls to help stimulate the economy amid the global financial crisis.
Many of the big state-owned lenders, including Industrial and Commercial Bank of China and Bank of China have announced plans to raise billions of dollars through sales of convertible bonds or new shares.
Beijing, April 21, 2010 (AFP)
