Chinese steelmaker defaults on bonds

Province-owned Dongbei Group also lost its chairman to suicide in mid-March.

China-based steelmaker Dongbei Special Steel Group, based in the city of Dalian, has reportedly missed two corporate debt payments, one in late March and the other in early April 2016. The missed payments were preceded by the apparent suicide of the Liaoning-province owned steelmaker’s chairman.

According to an online report from the Hong Kong-based South China Morning Post, Dongbei notified investors through announcements on the website of the Shanghai Cleaning House that it had missed a late March corporate debt payment of RMB 852 million ($131 million) and anticipated missing another RMB 1 billion ($157 million) in early April.

The Morning Post termed it “a rare default by a local government-owned company in the interbank bond market.”

The default announcements in late March came within a week of reports that Dongbei Chairman Yang Hua had committed suicide by hanging himself at home, according to the Morning Post.

The newspaper also reports that chief debt underwriter China Development Bank is in negotiations with the Liaoning provincial government and the city of Dalian’s government to work out a potential debt repayment plan.

On its website Dongbei Special Steel Group says it manufactures stainless steel long products, bearing steel, tool and die steel and automotive steel.

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