(Adds detail, comments)<\/p>\n
SHANGHAI, Aug 11 (Reuters) – Fitch Ratings said on Wednesday it has downgraded Huarong Industrial Investment & Management Co, citing weak ties with its troubled, and state-controlled parent.<\/p>\n
Huarong Industrial is a unit of bad loan company Huarong Asset Management.<\/p>\n
Fitch said it had cut its long-term foreign-currency Issuer Default Rating to \u201cCCC\u201d from \u201cBB\u201d.<\/p>\n
It lowered its assessment of Huarong Industrial\u2019s links with its troubled parent to \u201cweak\u201d from \u201cstrong\u201d and noted there is \u201cno certainty that any government support to China Huarong will flow through\u201d to the company.<\/p>\n
The rating agency also cited a lack of a refinancing plan for Huarong Industrial\u2019s debts maturing in 2022.<\/p>\n
Huarong, which counts China\u2019s finance ministry as its biggest shareholder, missed a March 31 deadline for filing its 2020 earnings, sparking a rout in its bonds amid growing concern over its financial health.<\/p>\n
Last week, Huarong announced plans to sell a 70% stake in a consumer finance unit, and revamp its trust subsidiary, as part of a restructuring effort.<\/p>\n
\u201cFitch believes there is growing uncertainty over the parent\u2019s intention to support Huarong Industrial\u2019s liquidity needs in the future,\u201d Fitch said.<\/p>\n
\u201cWe have been unable to confirm that Huarong Industrial remains a core subsidiary of China Huarong as China Huarong embarks on an asset disposal plan.\u201d<\/p>\n
In addition, Huarong Industrial has no refinancing plan yet for its capital market debts, which exceeded 6 billion yuan ($925 million) at the end of June, Fitch said.<\/p>\n