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Restructuring Pace of Shanghai SOEs Quickens

Data Analysis 08:58:40AM Jan 21, 2010 Source:SMM

BEIJING, Jan. 21 -- The local government is seeking to speed up restructuring of Shanghai's State-owned enterprises (SOEs) by pushing them to go public, Shanghai Vice-Mayor Ai Baojun said Wednesday.

The city is targeting a securitization ratio of up to 90 percent for State-owned companies, Ai said on local radio. Ai didn't elaborate on when the target would be reached.

Securitization is the process by which a company packages its financial assets and then markets them to investors.

The purpose of the securitization effort is to diversify the shareholders of State-operated assets, said Ai. "We encourage capital investment from some funds, including private equities, in our State-owned enterprises," he said.

With the city's exports down, Shanghai officials believe the timing is right to further restructure State-owned enterprises.

Just last week, Yang Guoxiong, director of the Shanghai Municipal State-owned Assets Supervision and Administration Commission, said over 30 percent of State-owned assets in the city - valued between 20.3 billion and 23.7 billion yuan - will realize securitization this year, up some 7 percentage points from 2009.

"The main goal in 2010 is to push assets held by the State-owned conglomerates to go public, making their listed units the major platform for them," said Yang.

Official figures show Shanghai's State-run firms contributed 352.8 billion yuan to the nation's gross domestic product in 2009.

According to Ai, 50 percent of Shanghai's economic output was generated by State-owned firms, for a combined profit of 40.9 billion yuan in 2009, up 53.3 percent from a year earlier.

According to reports from the Securities Times, one-quarter of Shanghai's 72 State-owned firms has undergone restructuring during the past year. These include Shanghai Airlines and financial services provider Aijian Corp.

Debt-laden electronics giant SVS Group Co completed its restructuring last December by selling its entire stake in its two listed units to another government-owned assets management company, Shanghai Yidian Holdings, to alleviate cash flow problems. The two listed firms both reported huge losses in 2008.

 

Restructuring Pace of Shanghai SOEs Quickens

Data Analysis 08:58:40AM Jan 21, 2010 Source:SMM

BEIJING, Jan. 21 -- The local government is seeking to speed up restructuring of Shanghai's State-owned enterprises (SOEs) by pushing them to go public, Shanghai Vice-Mayor Ai Baojun said Wednesday.

The city is targeting a securitization ratio of up to 90 percent for State-owned companies, Ai said on local radio. Ai didn't elaborate on when the target would be reached.

Securitization is the process by which a company packages its financial assets and then markets them to investors.

The purpose of the securitization effort is to diversify the shareholders of State-operated assets, said Ai. "We encourage capital investment from some funds, including private equities, in our State-owned enterprises," he said.

With the city's exports down, Shanghai officials believe the timing is right to further restructure State-owned enterprises.

Just last week, Yang Guoxiong, director of the Shanghai Municipal State-owned Assets Supervision and Administration Commission, said over 30 percent of State-owned assets in the city - valued between 20.3 billion and 23.7 billion yuan - will realize securitization this year, up some 7 percentage points from 2009.

"The main goal in 2010 is to push assets held by the State-owned conglomerates to go public, making their listed units the major platform for them," said Yang.

Official figures show Shanghai's State-run firms contributed 352.8 billion yuan to the nation's gross domestic product in 2009.

According to Ai, 50 percent of Shanghai's economic output was generated by State-owned firms, for a combined profit of 40.9 billion yuan in 2009, up 53.3 percent from a year earlier.

According to reports from the Securities Times, one-quarter of Shanghai's 72 State-owned firms has undergone restructuring during the past year. These include Shanghai Airlines and financial services provider Aijian Corp.

Debt-laden electronics giant SVS Group Co completed its restructuring last December by selling its entire stake in its two listed units to another government-owned assets management company, Shanghai Yidian Holdings, to alleviate cash flow problems. The two listed firms both reported huge losses in 2008.