(Reuters) – China Huarong Asset Management Co Ltd, the country’s biggest bad-debt manager, said on Thursday regulators have approved a deal for it to sell a 20.98 percent stake to a consortium of eight investors for 14.5 billion yuan ($2.4 billion).
The deal for new shares in the company is to raise funds for Huarong ahead of a planned initial public offering, Reuters reported in July.
The consortium includes China Life Insurance (Group) Co , U.S. private equity firm Warburg Pincus, Goldman Sachs, CITIC Securities International Co Ltd , Malaysian sovereign wealth fund Khazanah Nasional Bhd, COFCO Corp, Fosun International and International Capital Corp.
The investors will improve corporate governance and operations at the company, said Huarong chairman Lai Xiaomin.
Huarong, which was founded in 1999, will also launch partnerships with the investors in areas like asset management, investment and financing, investment banking and financial leasing, the firm said.
State-owned bad-debt managers like Huarong are benefiting from a rise in non-performing loans in China as the economy slows. The company had assets worth $65.7 billion under management at end-2013 and its net profit for last year jumped 44 percent to 10.1 billion yuan.
The deal was signed at Huarong’s Beijing headquarters on Thursday.