A 24 billion-yuan transformation and development fund will be set up by China Construction Bank Corp jointly with Wuhan Iron and Steel Group Corp, Reuters reports.
12 billion yuan have already been invested into the funding programme, as it is said in the official statement released on Tuesday.
An article published earlier by China Daily said the reduction in leverage would be accomplished mainly through debt-to-equity swaps.
On the 10th of October, China's cabinet released guidelines for debt-to-equity swaps, which is considered to be one solution to China's corporate debt totaling $18 trillion, that is approximately 169% of gross domestic product.
Chinese authorities will take a diversified approach to reduction of company debt, in particular, by encouraging mergers and acquisitions, bankruptcies, debt-to-equity swaps and debt securitisation.