On December 18, 2016, ICBC and Beijing Building Materials Limited (“BBMG”) and Jidong Development Group Co., Ltd. (“JIDD”) signed the Debt-for-Equity Swap Cooperation Agreement. Under the agreement, ICBC and JIDD will carry out debt-for-equity swaps with a total amount of RMB 5 billion. The investment will be made in stages, including RMB 2.5 billion in the first stage, into the enterprise through the limited partnership fund model for the replacement of outstanding loans of the company to realization transfer between creditor’s right and equity.

JIDD is a key enterprise in Hebei Province as well as a large backbone enterprise in China’s building materials industry. Its controlling shareholder is BBMG. JIDD has currently developed into a large integrated enterprise group covering cement concrete, equipment manufacturing and trade. Since October, ICBC has actively responded to the policy guidance of the State Council on corporate de-leveraging. In strict accordance with market-based and legal requirements, the Bank has been actively promoting debt-for-equity swaps and launched relevant business cooperation with JIDD. Once all funds related to the debt-for-equity swaps are in place, JIDD will reduce the leverage ratio by around 8%, which is conducive for the capital strength increase, financial leverage reduction, financing structure upgrading and cost burden reduction of the company. ICBC will provide financial support for debt-for-equity swaps to help JIDD upgrade the industrial structure, increase investment in research and development, develop resource-saving and environment-friendly industries and explore a new way of energy conservation and environmental protection and sustainable development, which can contribute to haze control and ecological environment protection of Beijing.

In 2016, in response to the policy guidance of the central government on the supply side structural reform, ICBC has also provided M&A financing support for BBMG’s acquisition of JIDD to reduce surplus capacity of the cement industry, optimize the industrial structure of Beijing, Tianjin and Hebei Province, boosting coordinated development among Beijing, Tianjin and Hebei by supporting trans-regional merger and restructuring.