Research For Way Of Bad Assets'Disposition Of Chinese Financial Asset Management Corporation

Set up in 1999, the Asset Management Corporation of Great Wall, Cinda, Huarong, Dongfang had acquisition the bad assets of Chinese national commercial banks. After 5 years' management and disposal, these corporations have already revitalized, sold some bad assets and made some enterprises earn profit. The assets disposal in China has gotten some achievements. Nowadays, the asset-management had exited for 5 years, covered half of the 10 years' existence period. These corporations are now facing the problems of how to disposal the bad-assets further and transfer their operation orientation. These problems will be serious with the deadline coming year.First of all this paper make a review of the achievement of the asset management corporations got in the last 5 years and the situations of the bad-assets' disposal. Secondly this paper analyze the main way of the bad-assets' disposal adopted by these asset management corporations: debt-equity swap, asset reintegration, sale, then analyze the virtues and shortcomings of these ways in detail, and put forward the way of improvement. Then it discusses the usual way of bad-assets disposal: asset-backed secularization. Finally it makes a concise analysis of the transfer operation orientation of the asset management corporations.This paper consider that a careful analysis should be made to the bad-assets if those assets would be disposed by way of debt-equity swap and make chosen after reasoning in detail in order to prevent the enterprise fleeing from debts. As to the bad-assets to be disposed by debt reintegration, the way should be integrated with equity reintegration and enterprise reform in order to get more profit. As to the bad-assets sales, the dealing should be open, clarity, fair, and the after –sale service should be done well.This paper consider that the carrying out of asset-backed security is now facing the fence of low and market, but an attempt can be done. If it is feasible the way can be carried out step by step, cooperated by the stock market.This paper finally consider that after the disposal of the bad-assets the asset management corporation should merge some of their department, transferring into investment bank step by step. ...