China's DITIC to be declared bankrupt

Japan Economic Newswire

September 17, 2000, Sunday

LENGTH: 206 words

HEADLINE: China's DITIC to be declared bankrupt

DATELINE: DALIAN, China, Sept. 17 Kyodo

BODY:

China's financially troubled Dalian International Trust and Investment Corp. (DITIC) will be declared bankrupt after repaying part of its debts in arrears to its foreign creditors, the acting mayor of Dalian said Sunday.

Acting Mayor Li Yongjin told foreign journalists that the decision was reached after negotiations between the city and creditor banks of DITIC, which is affiliated with the city.

DITIC will be declared bankrupt after it repays 60% of its debts, he said.

Li said DITIC's debts in arrears total $150 million.

By June, six Japanese banks, including Fuji Bank, the Industrial Bank of Japan and Sumitomo Bank, had agreed to forgive $36 million of their combined $90 million in loans to DITIC that are in arrears.

DITIC has reached a similar loan-forgiveness agreement with 16 Hong Kong, European and U.S. banks for the remaining $60 million of its debts in arrears, Li said.

DITIC's bankruptcy follows the failure of Guangdong International Trust and Investment Corp. (GITIC), a nonbank institution affiliated with the Guangdong provincial government, in January 1999.

Beijing reportedly plans to trim the number of financially troubled trust-and-investment corporations from some 240 to 40-50.

LANGUAGE: ENGLISH

LOAD-DATE: September 17, 2000