(Yicai Global) July 18 -- A financial leasing arm of China's largest state-owned rolling stock firm CRRC has widened its losses.
CRRC International & Leasing has not paid for some 60 projects with total overdue liabilities of CNY6 billion (USD894 million), local news outlet China Business reported. This debt has a high risk of turning into non-performing loans, an insider from the firm added.
CRRC has taken coping measures to deal with the losses of CRRC International & Leasing based on relevant laws and regulations, as well as internal provisions, the Beijing-based parent responded to CB's inquiry regarding the reason for such mounting liabilities. The firm said it plans to pay the money back within three to five years, without adding more details about the causes.
CRRC Investment Leasing's financial lease platform involves large-sized equipment rental for rail transit and urban infrastructure, as well as new energy vehicles made by its parent.
The major business of CRRC International & Leasing has basically come to a standstill, a source from the parent's former venture CNR Investment & Leasing said, adding that CRRC plans to restructure the leasing arm into an asset management company that specializes in bad debt.
CRRC said that it is transferring some employees to newly established CRRC Financial Leasing, CRRC Zhuzhou Electric Locomotive, and CRRC Logistics.
The parent's stock price fell to HKD6 (USD0.76) at 2.30 p.m. Beijing time from yesterday's closing price of HKD6.1.
Editor: Emmi Laine