Baoding Tianwei Group, owned by the China South Industries Group, has become the country’s first state-owned company to announce a default on its bonds traded in mainland China, after failing to pay $13.8 million in interest.
The company said it won’t be able to pay interest on the bonds by Tuesday, April 21. However, it will continue to raise funds for debt repayment in various ways, including the sale of assets, says a statement on the China Foreign Exchange Trade System website.
“Our company suffered huge losses in 2014 and the debt to asset ratio surged quickly,” Baoding Tianwei said in Tuesday’s statement. “Our company has lost financing ability and suffered from a capital shortage. We can’t raise enough money to repay interest, despite all the efforts we have made.”
Kaisa Group Holdings Ltd. became the first Chinese developer to default on its US currency debt Monday, failing to make a scheduled interest payment of $16.1 million.