Skip to main content

Paul Hastings has advised China Orient Summit Capital – an offshore investment management platform created by China Orient Asset Management and its unit, China Summit Capital – and U.S.-based buyout firm KKR on a strategic partnership to capitalise on the growing Chinese market for distressed debt, specifically in the real estate sector.

China Orient is one of only four licensed state-owned asset management companies and wholesalers of non-performing loans (NPL) in the country.

A cross-border team from Paul Hastings team handled the deal, led by Hong Kong-based partners Vivian Lam and Pei Fang and London-based partner Garrett Hayes.

China's distressed debt market has been dominated by the Big Four asset management firms such as China Huarong Asset Management Co and China Cinda Asset Management Co.

But there have been signs that overseas investors are looking the rapidly expanding market, as slowing growth for the world's second-largest economy pushes more borrowers into default. Many borrowers use property, including factories and buildings, as collateral.

Goldman Sachs Group and Oaktree Capital Group were among 120 institutional investors attending a $7 billion bad debt portfolios offering by China Cinda last May, the largest ever sale promotion of the state-owned distressed debt manager.

Non-performing loans (NPLs) at Chinese commercial banks grew 36 percent to 1.95 trillion yuan during 2015, and marked their 17th consecutive quarter of increase.

China's property market, with a vast amount of unsold apartments, mainly in smaller cities, has been a major source of troubled loans.

The sector had more than 20 trillion yuan ($3 trillion) of outstanding loans from financial institutions at the end of the third quarter last year, accounting for 22 percent of total yuan-denominated loans, data from the central bank show.

Related Articles

A&O Shearman、高赢助力中国生物医药公司普米斯9.5亿美元并购交易(ZH/EN)

近日,A&O Shearman作为BioNTech的法律顾问,为其收购中国生物医药公司普米斯提供法律服务;高赢国际律师事务所则为普米斯提供法律意见。

汉坤、方达、竞天公诚、凯易助力科创板首单“A收H”交易(ZH/EN)

科创板上市公司亚信安全完成香港联交所主板上市公司亚信科技的控制权收购。汉坤律师事务所在交易中为买方提供中国法律服务;方达律师事务所、凯易国际律师事务所则担任卖方法律顾问;竞天公诚律师事务所担任融资方渤海银行的法律顾问。

方达、苏利文、奋迅·贝克麦坚时助力中印26亿美元钢铁领域合资交易(ZH/EN)

中国民营钢铁公司中国东方集团宣布将与世界第二大钢铁公司、印度安赛乐米塔尔合作,共同在中国设立两家合营企业。方达律师事务所、美国苏利文·克伦威尔律师事务所作为中国东方集团的律师参与交易;奋迅·贝克麦坚时为安赛乐米塔尔提供法律意见。