DeHeng Advised Agricultural Bank of China on Achieving Approval
for the Establishment of ABC Financial Asset Investment Co., Ltd.,
a Market-Oriented Debt-To-Equity Swap Platform.

2017-08-01

On July 27, 2017, the China Banking Regulatory Commission (CBRC) formally approved the establishment of ABC Financial Asset Investment Co., Ltd. ("ABC Investment"), which is one of the first institutions authorized to implement market-oriented debt-to-equity swap in China. The scope of business of ABC Investment is to carry out market-oriented debt-to-equity swap and supportive business. With a registered capital of 10 billion yuan, ABC Investment is the largest wholly-owned subsidiary of ABC to date in terms of registered capital. The establishment of ABC Investment marks the market-oriented debt-for-equity business of ABC has entered into a new era of rapid progress and steady development. 

Recently, market-oriented debt-to-equity swap has become an important measure to help enterprises to reduce leverage ratio, as well as a key financial instrument to defuse financial risks. As one of the big state-owned banks, ABC took the lead in convening its board of directors to approve the proposal of setting up ABC Investment and applying for the same to the regulatory authorities. ABC Investment has signed debt-to-equity swap cooperation framework agreements with a number of enterprises, with a sum of 200 billion yuan so far.

DeHeng has long provided ABC's head office with comprehensive legal services in areas such as investment, compliance, and litigation. The DeHeng team comprised of Xu Jianjun, Liu Huanzhi, Sun Yanli and Li Ruiqing, provided professional and efficient legal support for this project in the whole process.