Ewing Management Group, formerly Carlyle Management Group, said it is in talks with China's four state-owned bad-debt managers to buy non-performing assets.
``There are a lot of tremendous companies that are thrown in these bundles of non-performing loans that are simply sold for a penny and a dollar to investment banks,'' Douglas Nyhoff, Ewing executive vice president said in an interview in Shanghai.
The company is talking to bad-debt managers, including China Huarong Asset Management Corp., to ``cherry-pick'' companies with potential before they are sold to companies such as Goldman Sachs and Morgan Stanley, Nyhoff said.
China set up Huarong, Cinda Asset Management Corp., Great Wall Asset Management Corp. and Orient Asset Management Corp. in 1999 to clean the balance sheets of the four biggest state-owned banks. The companies have a mandate to clear all 1.4 trillion yuan ($173 billion) of ``policy loans,'' or government-directed lending to unprofitable businesses, transferred to them six years ago at face value, by the end of next year.
Ewing Management's main investment focus is on China, company Chairman B. Edward Ewing said, declining to say how much will be invested in the country. The management firm has over $1 billion in capital. It is considering investing in the automotive industry, as well as machine tools and construction equipment, he said.
Ewing-controlled Key Plastics LLC, a closely-held U.S. maker of plastic car parts, and Key Safety Systems Inc, have invested $50 million in forming joint ventures in China with affiliates of Shanghai Automotive Industry Corp.
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