Yongtai Pursues Debt-to-Equity Swap

Wintime *Yongtai) Energy failed to repay a debt this week. this triggered defaults on other debt issued by the firm. Its parent company, Yongtai Group, will pursue a debt-to-equity swap.

Caixin: Wintime Energy Defaults on $226 Million Bond
Wintime Energy Co. became the latest Chinese bond defaulter as the coal miner failed to pay interest Thursday on a 1.5 billion yuan ($226 million) short-term bond. The missed payments sparked concerns of further defaults.

The Shanghai Clearing House didn’t receive interest payments from Wintime Energy for a bond issued in 2017, the clearing house said late Thursday in a statement. The missed payments triggered cross defaults of other debt securities issued by Wintime, according to the statement.

As of June 29, Shanghai-listed Wintime and subsidiaries had outstanding bonds and debt securities totaling 27.4 billion yuan, including $500 million of U.S. dollar-based offshore bonds, market records show. The company is the second-largest corporate debtor in the bond market behind only embattled financial conglomerate CEFC China Energy, with 29.6 billion yuan of outstanding bonds.
On Sunday, it was reported the firm will have its debt converted into equity.

每经网: 永泰能源违约后宣布:与5银行达成合作 将实施240亿债转股
Wang Guangxi also said that Yongtai's energy debt is 72.1 billion yuan, and the debt ratio is 72.3%, which is at a relatively high level, slightly higher than some large state-owned enterprises. Affected by macro factors such as deleveraging, private enterprises have certain difficulties in issuing bonds, and bank loans are also very serious.

...Up to now, the company has not paid the balance of direct debt financing of 24.12 billion yuan and 500 million US dollars, of which 7.3 billion yuan of short-term financing bonds, 7.890 billion yuan of corporate bonds, 1.630 billion yuan of targeted instruments, and 5.3 billion yuan of medium-term notes. The subsidiary is repaying 2 billion yuan of corporate bonds and 500 million US dollars of overseas debt.
CEO of the Yongtai Group, parent of Wintime Energy, says 24 billion yuan of debt will be converted into equity:
As for the next steps, Wang Guangxi said that he will do the following:

First, it is fundamental to stabilize the production and operation of enterprises.

The second is to actively lose weight and will sell 15 billion assets to actively repay money.

The third is to actively communicate with financial institutions and obtain new liquidity support.

The fourth is to implement a debt-to-equity transfer of 24 billion yuan.

The fifth is the issuance of convertible bonds based on the listed companies Yongtai Energy and Haide.

Wang Guangxi also announced at the meeting that last Friday (July 6) the company has reached a strategic cooperation agreement with five banks including policy banks, large joint-stock banks and city commercial banks, and five banks promised not to call in loans, continue to lend, give certain liquidity support.
He asks the market for calm:
Wang Guangxi also said, "Please ask creditors, investors, media, and regulatory agencies to give us support when the company is in difficulty. We are really doing business, and a small part of the investment, foreign investment accounts for less than 5%."

He also joked, "I will handle the debt well, I must make the business well. I will not run away, and I will not jump off a building."

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