For investors in bonds issued by Sichuan Coal Industry Group Ltd., it was a gut-wrenching experience.Sichuan Coal's default has imperiled a subsidiary, Sichuan Hua Ying Shan Guangneng. A project in Guang'an is underway, but requires 2 billion in debt. The subsidiary is hoping for government support, and Sichuan Coal was pushing the project with the party secretary and mayor of Guang'an only a week before defaulting. The bonds were approved by the Shenzhen Stock Exchange, but the default of the parent has thrown the bond issue into limbo.
They had thought their money was safe following the coal company’s notice on June 7 about its plan to repay the principal and interest of its CP001 bond issue maturing in a week.
But on June 14 Sichuan Coal suddenly alerted the investors about the uncertainties of meeting its obligations, the China Securities Journal reports.
...For every 100 yuan (US$15.19) worth of assets, almost 90 yuan is funded by borrowings, the Journal notes.
EO: 川煤集团短融违约 子公司20亿债券发行前途未卜
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