Industrial Bank's (IB) first marketized debt-to-equity project was closed. On April 5, IB and Ansteel Group signed a framework agreement of debt-to-equity fund in Beijing. According to the agreement, both parties reached a cooperation intention for a 10B debt-to-equity fund. The first stage of fundraising is 5 billion yuan with a term of 10 years.
Tao Yiping, the governor of IB, and Tang Fuping, chairman and secretary of the party committee of Ansteel Group, attended the singing ceremony. Chen Xinjian, the vice governor of IB, and Yu Wanyuan, the vice general manager and chief accountant of Ansteel Group signed the framework agreement on behalf of their respective party.
On October 10 last year, the State Council issued the Guiding Opinions on Debt Transferred to Equity by Marketized Banks.
CBRC also encourages to carry out market-oriented and legal debt-to-equity initiatives, and insist on independently negotiating and determining on the object, debt, price and conditions of share transfer, so as to promote the deleverage stably. According to the data of CBRC, as of the first half of February this year, the amount of signed debt-to-equity agreements has reached more than 430 billion yuan, and the executed amount more than 40 billion yuan. Marketization and legalization are two key features of this round of debt-to-equity initiatives. "The operation of debt-to-equity fund enables to improve the financing capability of enterprises, reduce the asset-liability ratio, improve the internal financial conditions and thus optimize the financing environment." said by Tao Yiping, the governor of IB.
As the Party Central Committee and the State Council are implementing another round of strategical layout for boosting the economy of Northeast China, the business environment in Liaoning Province is being improved and regional entity economy is embracing a rare opportunity. All these drive Ansteel Group to establish its footprint in the global market and accelerate its strategic advance. In recent years, Ansteel Group, also known as "the cradle of Chinese iron and steel industry" and "the eldest iron and steel enterprise in the New China", has set its foot in the iron and steel industry, kept increasing technical input and become the leading manufacturer of steel used in automobiles, home appliances, bridges, marine equipment, nuclear power, high-speed railway and etc. Its comprehensive competitiveness has been increasing. Especially since last year, its profitability has been rising and the company witnessed a good start in the first quarter this year.
Tao Yiping said that by virtue of group advantages and the multifaceted service platform, IB will provide Ansteel Group with all-round financial services and seek for further cooperation in capital equity, trading banking, FICC and other business. IB will fully support Ansteel to integrate strategic resources, expand the market and globalize the China's manufacturing industry, thus fueling the rapid development of both companies in their respective fields.
Tang Fuping said that this market-based debt-to-equity cooperation represents a useful practice that financial institutions facilitate to deleverage and stabilize the growth in entity economy. It is of great significance for Ansteel Group to optimize its asset structure and maintain healthy and sustainable growth. Ansteel Group should seize this advantageous opportunity to accelerate its strategic adjustment and upgrade, enhance the product quality and production efficiency, improve the production and operation, increase its profits and make it more competitive in the market.
Ansteel Group and IB have an outstanding history of cooperation. Since the establishment of cooperative relationship in 2009, they keep intensifying their partnership in traditional business, investment banking, trade financing, cash management, financial market and other areas. By taking this opportunity of debt-to equity cooperation, both companies support and deepen the national structural reform of the supply side and make great contribution to local economic revival.