China Huarong Asset Management (Huarong), the beleaguered bad debt manager, is set to divest a majority stake in its consumer finance unit to Bank of Ningbo.

The deal will see Bank of Ningbo paying $172.64m (CNY1.1bn) for a 70% holding in Huarong Consumer Finance.

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Upon completion, which awaits regulatory approval, the consumer finance unit will cease to be a Huarong subsidiary.

Huarong Consumer Finance’s divesture comes amid regulatory pressure on Huarong to sell its non-core operations for business restructuring, Reuters has reported.

In a November bourse filing, Huarong also revealed plans to divest a 40.5% stake Huarong Xiangjiang Bank, and a 79.9% stake in its financial leasing unit.

The Chinese finance ministry set up the asset manager in 1999 to take up bad loans from the country’s leading lenders.

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Earlier, Huarong missed a 31 March deadline for filing its 2020 earnings, which negatively impacted its US dollar-denominated bonds that eventually reached other Chinese issuers.

The bonds recovered after Huarong announced it will receive investment from a group of investors led by government-controlled Citic Group.

Separately, Ant Group’s consumer finance unit is set to receive CNY22bn ($3.45bn) in fresh funds from a group of investors.

Ant Group will lead the round, with China Cinda Asset Management, Sunny Optics, Boguan Technology, Yufu Capital and Yuyue Medical being the other participants.

Ant Group has also been directed by the government to restructure its businesses and Chongqing Ant Consumer Finance was set up as part of that process.