China Guarantee Firm Faces Funding Problems, Business News Says
Huading Financing & Guarantee Co., a guarantee company based in the southern Chinese province of Guangdong, is having difficulty getting funds, China Business News reported, citing an unidentified company official.
Banks have restricted lending to guarantee companies, causing Huading’s problems, the Shanghai-based newspaper reported. The company has loans with eight to nine banks including Industrial & Commercial Bank of China Ltd., China Development Bank Corp., and Agricultural Bank of China Ltd., according to the report. The company has 760 million yuan in registered capital and about 100 million yuan to 200 million yuan of liquid capital, according to the newspaper.
A person who answered the telephone at Huading Financing & Guarantee’s offices in the city of Guangzhou said she couldn’t immediately comment.
Guarantee companies, which insure the debts of other enterprises, had backed about 689.4 billion yuan of loans at the end of 2010, an increase of almost 70 percent from 2009, Zhu Yongyang, deputy director of the financial guarantee department at the China Banking Regulatory Commission, wrote in the Sept. 7 issue of China Finance. The magazine is published by the nation’s central bank.
To contact Bloomberg News staff for this story: Henry Sanderson in Beijing at firstname.lastname@example.org