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Troubled Sinosteel becomes first central government owned company to strike debt to equity swap deal-The 18th Guangzhou Die-casting, Foundry & Industry Furnace Exhibition
12/15/2016 Die-casting expo-foundry expo |
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nditions.
Mr Liao Qiang senior director of financial institutions ratings at Standard & Poor’s in Beijing said that “We still need more details about the deal to tell if banks, the debt holders, are suffering losses in the plan.”
Many analysts, including Mr Liao, believe that the swap plan in the Sinosteel case came with government support.
Sinosteel defaulted on its debt for the first time back in September 2014 and by the end of that year the company, with its 72 subsidiaries, had total debts of over 100 billion yuan. Of this, 75 billion yuan was owed to more than 80 Chinese and foreign banks, mainland media outlet Caixin reported, citing data from the Chinese banking regulator.
Debt has emerged as one of China’s biggest challenges, with the total rising to 250 per cent of GDP last year. Chinese companies sit on USD 18 trillion in debt, equivalent to about 169% of GDP, according to data from the Bank for International Settlements.
-The
18th Guangzhou Die-casting, Foundry & Industry Furnace Exhibition
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