Coal firm to pay outstanding debt today
Print Edition
A UNIT of state-owned ChinaCoal Group yesterday said it will pay off the principal and interest on an overdue commercial debt today, without specifying the source of its funds.
ChinaCoal Group Shanxi Huayu Energy Co failed to pay 637.7 million yuan (US$98.6 million) in principal and interest on domestic short-term commercial debt maturing on April 6, one of a string of recent defaults among Chinese firms.
“The company has overcome numerous difficulties, actively strived to raise capital from various channels, and now decided to pay off the debts in full on Wednesday,” it said in a statement posted on the website of the Shanghai Clearing House.
The case was the first domestic bond default by a company controlled by a state-owned coal mining group since 2012.
Shanghai Pudong Development Bank is the underwriter for Shanxi Huayu’s commercial debt, the statement said.
China’s bond market has witnessed an increasing number of defaults over the past year as the country’s economy slows and the government moved to slash capacity in traditional industries including steel and coal.
The National Development and Reform Commission ordered issuers to take stock of their ability to repay principal and interest and submit reports by April 15 every year, starting this month.
On Monday, China Railway Materials Co suspended trade in 16.8 billion yuan worth of its debt instruments.
Fitch Ratings said this week that Shanxi Huayu’s default highlighted the very difficult situation that many Chinese coal mining companies face.
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