Bond Market News

China’s Tsinghua University will hand over its investment arm, Tsinghua Holdings to the Sichuan State-owned Assets Supervision and Administration Commission (SASAC) for no consideration. The government agency will then transfer the assets to Sichuan Energy Industry Investment Group (SCEI), a state-owned enterprise under its control. Liu Guohong, chairman at Shenzhen Fuwei Funds said, “The transfer to SCEI marks a major part of the government’s shake-up of university-related enterprises after years of debt-fueled expansion,” adding that Sichuan’s state asset watchdog would have to shoulder Tsinghua’s bad debts. The deal is subject to regulatory approval but is part of China’s ongoing campaign to get the universities to divest their investment arms after suffering poor internal governance and lack of sufficient supervision. Tsinghua Holdings’ semiconductor subsidiary Tsinghua Unigroup filed for bankruptcy last year and is currently under a $9.4bn restructuring plan. The transfer of Tsinghua Holdings will not affect the debt restructuring plan.

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