By REUTERS
Zhuhai Zhongfu Enterprise Co Ltd, a Chinese bottle manufacturer, is poised to become the fourth firm to publicly default in China’s onshore bond markets today.
The firm has not raised sufficient funds to fully repay principal and interest due to investors on May 28, company statements posted on the Shenzhen Stock Exchange website on May 27 confirmed.
Trading in the company’s shares has resumed as at May 28, the statements added.
Zhuhai Zhongfu had previously warned investors that it might be unable to repay bondholders, and trading in its shares was suspended on April 30.
The issue in question is a three year 590 million yuan (RM350.5 million) 5.28% coupon bond, which is due to mature today.
If Zhuhai Zhongfu does not pay by the close of business as expected, it will become the fourth Chinese firm to publicly default in China’s onshore bond markets.
The first default, by solar company Chaori Solar in 2014, was accompanied by yield spikes and money market volatility, but investors have weathered this year’s two defaults with relative equanimity.
Indeed, market reaction on Wednesday was muted, with the weighted average of the benchmark seven-day repurchase agreement up three basis points to 1.94% at mid-day.
— by Nathaniel Taplin