Dongbei Special Steel Group Co. has defaulted on bonds a third time since its chairman was found dead by hanging last month, adding to mounting debt nonpayments in China.
The maker of alloy steels used in machinery and car parts failed to fully pay 45.04 million yuan ($6.97 million) of interest due April 12 on its 5.63 percent notes that mature in 2018, it said in a statement on Chinamoney’s website. The firm, based in the northeastern city of Dalian, cited tight cash flow and said it is raising money through various means.
Chinese firms are struggling with surging debt burdens as Premier Li Keqiang seeks to weed out zombie corporations amid the country’s worst economic slowdown in a quarter-century. At least seven firms have missed local note payments this year, already reaching the tally for the whole of last year.
Dongbei Special Steel failed to make a 852 million yuan bond payment on March 28, days after disclosing that its chairman, Yang Hua, was found dead by hanging at his home. It then missed payment on 1.01 billion yuan of separate securities due last week.
source; http://www.bloomberg.com