Cash-strapped Dalian International Trust and Investment Corp (Ditic) disappointed its financial creditors, saying they faced a high possibility of a cut in loan principal repayment.
Foreign bankers said the message was an ominous sign for the chances of recouping loans from other problem International Trust and Investment Companies (Itics).
Ditic was the first of the Itics to ask bankers to prepare for a haircut, or cut in loan principal repayment.
The message was delivered at a second meeting between Ditic and representatives from more than 20 domestic and foreign creditor banks and financial institutions in Dalian.
The meeting was also attended by senior officials from the Dalian government, the owner of the financially troubled Ditic.
They told the representatives that it would be unrealistic to think there would be no haircut. Officials said the government would help Ditic, but fell short of offering concrete plans.