(Yicai Global) Feb. 15 -- Two subsidiaries of an indebted trust company managed by Chinese conglomerate Cedar Holdings are operating as normal, the firms said in response to a letter from the Shenzhen stock exchange querying a sharp drop in their share price on Feb. 11.
Zibo Qixiang Tengda Chemical’s share price [SHE:002408] was trading up 3.08 percent at CNY9.36 (USD1.50) as of 12:30 p.m. today. While Cedar Development’s stock [SHE:002485] nudged up 0.72 percent to CNY4.18.
Cedar International Trust has failed to make CNY20 billion (USD3.1 billion) in payments scheduled for the end of January, according to a report by financial news outlet Caixin on Feb. 10.
The next day, Cedar Development’s stock price plummeted 7.9 percent and that of Qixiang Tengda 5.2 percent, prompting the Shenzhen bourse to issue an enquiry letter.
Cedar Holdings is taking measures to resolve the payment of overdue wealth management products, rubber and other chemical products maker Qixiang Tengda said yesterday. Qixiang Tengda shares the same owner, Zhang Jin, with Cedar Holdings.
The trust has bad debts of CNY2.15 billion (USD338.4 million) but these loans have not yet expired and there is no need for renewal, the Zibo, northeaster Shandong province-based firm added.
Cedar Development will not be affected, as despite sharing an owner with Cedar International Trust, it is a completely different legal entity, with separated assets, staff and businesses, the Guangzhou-based cultural tourism developer said.
Cedar Development is 70 percent owned by Guangzhou Cedar Culture Tourism Investment. Some 373 million shares out of 382 million have been pledged and there is no risk of liquidation of these pledged shares for now, it added.
Editor: Kim Taylor