Shanshui Suicide Liquidation

Business Standard: Man overboard
Lenders to companies in the People's Republic sometimes insert a provision that allows them to demand repayment if a top executive leaves. Yet, such "key man" clauses may be contributing to additional financial distress.

For an example of what can go wrong, consider China Shanshui Cement. The Hong Kong-listed group is facing liquidation after a shareholder spat led it to default on a 2 billion yuan ($314 million) onshore loan. Though China's cement industry is in poor shape, the immediate trigger for Shanshui's distress is an ongoing tussle for control between chairman Zhang Bin and local cement rival China Tianrui.
Global Cement: Tianrui Group will help fix Shanshui debt if EGM vote passes
The largest shareholder in Shanshui Cement, Tianrui Group, has said that it could help solve the debt woes of Shanshui Cement, if it is successful in a bid to change the company's board at an extraordinary general meeting on 25 November 2015, according to Bloomberg.

Shanshui, which is at the centre of a shareholder scrap for control, failed to pay US$314m of onshore notes due on 12 November 2015. It is at least the sixth Chinese company to default in the local bond market in 2015 as borrowers struggle amid an economic slowdown.
Reuters: China Shanshui says creditors demand repayment
Cash-strapped China Shanshui Cement has received several demands for repayments from creditors, following a default even as it had started winding up proceedings, it said in a stock exchange filing.

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