Jilin Trust default raises specter of more in coal industry
By Xie Yu in Shanghai (China Daily) Updated: 2014-02-21 07:18The fallout from the Jilin Trust default is spreading, and experts have warned of more default risks occurring in industries such as coal mining.
Songhuajianghao, a trust product designed by the Northeast China-based Jilin Trust and backed by a coal company called Shanxi Liansheng Energy, failed to meet redemption on Wednesday, missed payments for the fifth time and pushed its default volume to 872.7 million yuan ($143.5 million).
|
 |
|
 |
Jilin Trust said the default was caused by Liansheng Energy's failure to repay the loan.
"Jilin Trust is making full efforts to sort out the issue. Company executives have been visiting Shanxi many times. Commissioners are discussing with Liansheng Energy, CCB and other parties in Shanxi about repayment plans, to ensure investors' interests. Restructuring of Liansheng is underway," the company said in an e-mail to China Daily on Thursday.
According to a news conference held by a local court in Liulin county, North China's Shanxi province, where Liansheng Energy is based, the group is suffering from an outstanding debt of 30 billion yuan and is struggling to meet its liabilities.
The 21st Century Business Herald said on Monday that China Development Bank, also the biggest creditor of Liansheng Energy, is leading a restructuring of the company.
The plan would give Liansheng six years to restructure, and priority would be placed on paying off the trust products as they mature.
Liansheng Energy was not available to confirm the report on Thursday.
Earlier reports said that six trust companies, including Jilin Trust, had together lent 5 billion yuan to Liansheng.
Don't miss:
|
 |
 |
| China's top 10 richest cities |
- NHTSA says finds no 'defect trend' in Tesla Model S sedans
- WTO rare earth ruling is unfair
- Amway says 2014 China sales may grow 8%
- President Xi in Europe: Forging deals, boosting business
- CNOOC releases 2013 sustainability report
- Local production by Chery Jaguar Land Rover this year
- Car lovers test their need for speed in BMW Mission 3
- China stocks close mixed Monday
