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ICBC signs debt-to-equity swaps with three firms in Shanxi Province

INDUSTRIAL and Commercial Bank of China (ICBC), the country's biggest lender by assets, signed three debt-to-equity swaps with Shanxi province's state-owned coal and steel firms, the bank said in a note late Monday.

The three companies are Taiyuan Iron & Steel Group, Datong Coal Mine Group and Yangquan Coal Industry Group. ICBC said that it will invest into those firms to help increase their capital, swap their debt and reduce their corporate leverage.

The lender didn't release further details of the swaps, but the total value is estimated at 30 billion yuan (US$4.32 billion) and will help to cut the three firms' leverage by 10 percent, local media Shanxi Youth Finance said in its official social media account.

The Shanxi province is the biggest cola producing region in China, with annual production of coal at 944.1 million tons in 2015, amounting to 25.6 percent of the national total, open data showed. The province is facing challenge as the country seeks to reduce production of mines and plants to serve the supply side reform and to deleverage the corporate debts.

The provincial government of Shanxi invited more than 200 financial institutions for in mid-August for on-site survey of coal firms, with an aim to attract financial supports to its indebted coal industry, the Paper reported earlier.


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