NewChina Shanshui Cement defaults on 1.8 b yuan bond
The default is the second in two months following failure to repay a 2 billion of yuan onshore bonds in November
Debt-laden China Shanshui Cement Group has defaulted on a mainland-issued bond, its second in two months, dealing a blow to rival Tianrui Group’s plan to take over the company as part of Beijing’s push for consolidation of the overcapacity-plagued cement sector.
Hong Kong-listed China Shanshui’s principal subsidiary Shandong Shanshui said it has defaulted on a 1.8 billion yuan (HK$2.13 billion) three-year bond carrying an annual interest rate of 5.4 per cent that matured on Thursday.
The
development has pushed China Shanshui, the nation’s seventh-largest cement maker, closer to bankruptcy, as its earlier debt default triggered multiple lawsuits from creditors that have already seen some of its assets frozen or put into impending auctioning.
“The underlying cause of Shandong Shanshui’s debt problems is unresolved disputes over shareholders’ control, which restricted its fund-raising channels,” Shandong Shanshui said in a statement posted Thursday on chinabond.com.cn, the main platform for mainland bonds issuers’ information disclosure.
Since the estimated value of the company’s assets far exceeds its debt, it expects court-ordered assets sales to bring in less proceeds than claims made by creditors, it added.