June 9 -- Hunan Friendship and Apollo Commercial (002277), the largest department store operator in Hunan province, will establish a subsidiary, Friendship and Apollo Guarantee, which will have a registered capital of 100 million yuan, reports China Securities Journal, citing a company filing.

The subsidiary will provide guarantees for the company’s suppliers.

Friendship and Apollo will contribute at least 90 percent of the subsidiary’s registered capital while the management team of the subsidiary will have the option of contributing the remaining 10 percent.

Friendship and Apollo will contribute the remaining 10 percent of the capital should the management team decline to contribute.

Friendship and Apollo has close relations with several banks and has a significant amount of cash on hand. In addition, it is experienced in operating small loan companies.

The plan to establish the subsidiary is pending the approval of the Hunan provincial government and shareholders.