CLIFFORD CHANCE PRESS RELEASE

Clifford Chance has advised The International Finance Corporation (IFC) on the sale of a portfolio of non-performing loans by Huarong Asset Management Company Huarong) valued at RMB10.8 billion.

IFC provided equity and debt financing up to USD31,500,000 to support the purchase of the NPL portfolio by a joint venture established by a Morgan Stanley-led consortium which includes Salomon Smith Barney, Lehman Brothers and KTH Capital Management, and Huarong.

The sale, which closed on 13 March 2003, was the largest sale of NPL assets in China to date. It was also the first onshore international and domestic joint venture vehicle for acquiring Chinese NPLs.

Clifford Chance's Shanghai and Hong Kong offices were involved in the deal. The team was led by finance partner Stephen Harder in Shanghai, and included capital markets partner Jon Zonis and finance partner Evan Cohen in Hong Kong, supported by associates Grant Buerstetta, Steve Lyons and Alan Yeung in Hong Kong.

Stephen Harder commented: "This was an interesting and complex deal and a first-of-its-kind transaction for China. We are delighted by its success."