(Yicai  Global) Dec. 4 -- China's central Hubei province will set up a bailout  fund worth CNY10 billion (USD1.5 billion) to help cash-strapped listed  companies.

The  Hubei provincial government will hand out CNY4 billion, funded by four  state-backed firms and financial institutions, in the initial batch of bailouts, Hubei News reported. 

The  province is home to 103 listed companies, including 63 private ones.  The shareholding pledge rate of controlling shareholders in 21 Hubei  listed firms has exceeded 80 percent, while asset-liability ratio at 26  enterprises has reached between 60 percent and 80 percent. China's stock  market has fallen more than expected since the turn of the year and  some pledged shares in listed firms have been sold. 

Some  private listed firms have received state capital assistance and  effectively alleviated risks. The basic method of aid is state capital  temporarily buying up part of the shares or providing loans to  shareholders to help them pay equity pledged loans.

The  fund will avoid situations in which lending brokers or banks force  shareholders to sell pledged shares as collateral after share prices  drop and prevent major shareholders from losing control over companies.

China's  stock market has performed quite poorly this year. The Shanghai  Composite Index has fallen 21.9 percent so far and many firms have  plunged by more than half as of Nov. 30.

Dozens  of provinces and cities including Zhejiang, Shenzhen, Shanghai, and  Shandong have established such rescue funds for listed companies so far.