Western banks line up for stake in China's Huarong Asset Management

|By:, SA News Editor

Goldman Sachs (GS), Morgan Stanley (MS), and Deutsche Bank (DB) want to get a piece of the $1.5B-$2B stake sale ahead of what's expected to be an IPO next year, reports the FT.

Huarong is the largest of the four funds set up in 1999 to help clean up the last asset bubble there by removing about $230B in bad loans from the country's big 4 state-owned banks. The western banks want in amid concern about another wave of bad loans across China which would be manna for companies like Huarong.

The fund reportedly plans to sell a  15-20% stake in itself to set the table for an IPO - similar to plans for Cinda Asset Management, another bad loan vehicle.