Chinese fertiliser firm says may not be able to make bond payment amid liquidity crunch

Photo: REUTERS/JASON LEE

Jiangsu Luling Runfa Chemical Co, an unlisted chemical fertiliser company, said it may not be able to pay principal and interest due on a collective 100 million yuan ($15.7 million) note maturing on Dec. 4.

It said in a statement posted on the website of one of China’s main bond clearinghouses that it was unable to do so amid severe business and liquidity difficulties.

The company was contractually obligated to deposit funds for the 53.1 million yuan payment on Nov. 20, 10 business days before principal and interest on the bond were due, but had so far failed to do so, the company said.

If the firm is unable to make repayment, the bond guarantor Jiangsu Re-Guarantee would be responsible for doing so, the statement said.

Chinese bond defaults have been accelerating this year as the construction, heavy industry and mining sectors remain under severe pressure from weak demand and falling factory gate prices.

Following the latest default by China Shanshui Cement Group Ltd in early November, more than 40 companies have delayed or cancelled more than 40 billion yuan of bond issuance.

Chinese AA-rated corporate debt yields are up around 20 basis points since the start of November, in part reflecting rising concerns on creditworthiness in the heavy industrial sector.

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Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.