CHINA Huarong Asset Management Co. will sell a 70 percent stake in its consumer finance unit for 1.1 billion yuan (US$172.64 million) to Bank of Ningbo, as Huarong continues to divest assets as part of a business revamp.

After the completion of the deal, Huarong Consumer Finance, the unit, will no longer be a subsidiary of the group, according to a statement filed by Huarong to the Hong Kong stock exchange Monday.

Huarong and Bank of Ningbo reached an equity transfer deal Dec. 27 and it is still subject to regulatory approval, according to the statement.

Huarong, one of four debt collectors created by China’s finance ministry in 1999 to process bad loans made by the country’s biggest banks, had missed a March 31 deadline for filing its 2020 earnings, sparking a rout in its U.S. dollar-denominated bonds that spread to other Chinese issuers.

The bonds then rose in August after it revealed a State-backed rescue plan, under which a consortium led by State-owned Citic Group Corp. agreed to make a strategic investment in it.

The State consortium will help it secure fresh capital worth 42 billion yuan, the company said last month.

Besides the consumer finance unit, Huarong has announced similar plans to sell stakes in a distressed asset exchange unit and the securities unit, amid a regulatory push to sell non-core assets as part of its business restructuring.

Last month, Huarong was granted approval to raise 70 billion yuan in financial bonds in the interbank market, as it continues to improve its credit profile and re-focus on its main bad loan business. (SD-Agencies)