China Orient Asset Management Corporation is inviting international bidders to an auction of 3.12 billion yuan's (US$385.1 million) worth of non-performing assets (NPAs) due to be held early next year.

It is the latest attempt for the mainland's asset management corporations (AMC) to dispose of NPAs from the 'big-four' state-owned banks. China Orient is one of the four largest asset management corporations on the mainland.

"The auction will open for bidding in January," Sui Zheng, deputy general manager of China Orient's Qingdao Branch, told reporters in Hong Kong yesterday.

Most of the non-performing assets originated from banks in Qingdao, Yantai and Weihai in east China's Shandong Province.

These assets were built up by 104 borrowers, and have a book value amounting to 3.12 billion yuan (US$385.1 million) and were acquired by the Bank of China in 2000.

The sealed-bid auction is scheduled for January 26, Sui said, but he refused to reveal the decided starting prices.

"Bidders who have so far signed contracts confirming their attendance are all overseas investors, though we do not know the total number of interested parties," he added.

"The auction offers an attractive opportunity for international investors who are looking to invest in the mainland's asset market and we are actively encouraging international participation in this auction," Sui said.

World leading accounting firm KPMG is the financial advisor to assist China Orient on the auction process. Jannie Wong, a partner in KPMG's Financial Advisory Services Practice, said that detailed information about the asset portfolios would be provided to potential investors who successfully register for the auction.

"The value of NPAs are very high on the mainland. The four largest (AMCs) acquired NPAs from four State-owned banks in 1999 amounting to US$170 billion," Wong said.

(China Daily December 13, 2005)