China Huarong Asset Management, a state-owned distressed debt manager, has agreed to acquire a 5.01% stake in CITIC Ltd for HKD13.63bn (USD1.75bn). This move, aimed at improving Huarong's finances and asset quality, involves purchasing shares from a subsidiary of CITIC Group, which is backed by the Chinese finance ministry. CITIC Ltd, a diversified conglomerate, operates in financial services, manufacturing, and energy. CITIC Group, owning 26.5% of Huarong, is its largest shareholder. This transaction is intended to boost Huarong's capital and sustainable profitability, according to reports. Huarong recently reduced its net loss to CNY4.9bn, while CITIC's net profit fell 23% year-on-year. The deal awaits approval from China's finance ministry and other authorities, and Huarong plans to nominate a director to CITIC Ltd post-approval.