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Chinese asset management company Zhongzhi Enterprise Group will conduct a debt restructuring as a deepening real estate debt crisis raises fears about spillover risks to the broader financial sector.
Zhongzhi has stopped payment to investors in all investment products, its management told investors in a meeting on Wednesday.
The company has hired one of the Big Four accounting firms to conduct a comprehensive audit of the company, and is seeking strategic investors, its management said in the meeting
The plan is for “self-rescue” through restructuring, with a focus on debt collection and asset liquidation, but bankruptcy is also an option, they added, without disclosing the amount of debt that needed to be restructured.
That came after Zhongrong International Trust, controlled by Zhongzhi, missed payments on dozens of investment products since the end of July.