September 13, 2018 / 12:39 PM / in 7 months

China's cabinet tells state firms to lower debt levels

BEIJING, Sept 13 (Reuters) - China aims for a cut of 2 percentage points in the average ratio of liabilities to assets held by its state-owned enterprises (SOEs) by 2020 from 2017, state news agency Xinhua on Thursday quoted the cabinet as saying.

The government will create a sound policy environment to help the firms cut debt, it added, quoting guidelines issued by the cabinet, or State Council.

China’s highly indebted state firms should cut the ratios of their liabilities to assets to a reasonable level as soon as possible, Xinhua said.

China will steadily push forward market-based debt-to-equity swaps and debt restructuring, and will allow highly indebted state firms to raise capital and expand equity financing, it added. (Reporting by China monitoring deaks and Kevin Yao)

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