CICC, Goldman Sachs and Och-Ziff are among the companies preparing final bids for part of a strategic stake in the next of China’s former bad banks that is preparing a multibillion dollar listing, according to people familiar with the talks.

Huarong was set up in the late 1990s to take over the bad debts of China’s biggest bank, ICBC. It is following the path of rival Cinda, which took in strategic investors two years ago and completed a $2.5bn initial public offering in Hong Kong late last year.

The four bad banks created by China in the late 1990s are all being cleaned up in preparation to play an active role in a more market led selldown of future bad debts by China’s lenders. Banks are already offloading increasing amounts of bad loans, which are expected to keep growing as the economy slows and the excesses of the credit boom in recent years are exposed.