Guizhou Investment Firm to Repay 70% of Unpaid Trust to Reduce Province’s Hidden Debt

(Yicai) Nov. 20 — A trust issued by an investment company in southwestern Guizhou province, that matured two and a half years ago and is in default, will pay 70 percent of the CNY450 million (USD62.7 million) principal to investors, to help reduce the province’s invisible debt.

The trust, which is managed by Zhongtai Trust, was due in the second half of 2020. Although the debt was rolled over to March 2021, it has still not been paid. The trust was issued by urban investment platform company Bozhou Investment under the Finance Bureau of Bozhou District, Zunyi city.

The whole of Zunyi is promoting the resolution of its hidden debt, and the seven-part payment of the urban investment debt will count towards that, a senior executive at Zhongtai Trust told Yicai.

The current size of the trust is CNY439 million (USD61.2 million), according to the latest quarterly report. There are 128 individual investors and one institutional investor. The institutional investor is Zhongtai Trust, an investor told Yicai.

Hidden debts are those incurred by urban investment vehicles that belong to the local government but are not part of its finances. Since October, the Chinese government has launched a new round of actions to resolve invisible debts, including supporting local governments to issue special refinancing bonds and to repay these debts.

Some 28 provinces have disclosed their special bond issuance plans in this latest round, amounting to more than CNY1.3 trillion (USD181.2 billion). Guizhou, which is a relatively poor province, has issued the most at CNY214.9 billion (USD30 billion).

Another fund issued by Bozhou Investment and managed by Chang’an Assets Management is currently in liquidation. The investment firm has recently notified investors that they can transfer their shares out at a discount of 37 percent.

Editor: Kim Taylor

Read More: Guizhou Investment Firm to Repay 70% of Unpaid Trust to Reduce Province’s Hidden Debt

2023-11-20 11:39:46

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