(Yicai) March 19 -- Shares of Tech-Bank Food plunged after the troubled Chinese pork producer said it would pursue restructuring due to debts caused by declining pork prices.

Tech-Bank's stock price [SHE: 002124] dropped by 7.4 percent to CNY2.87 (US 40 cents), or almost 22 percent lower than at the beginning of this year.

The maker of pork products held a board meeting yesterday and passed a resolution to file for pre-reorganization and in-court restructuring, the Shanghai-based firm announced yesterday. Shareholders need to still approve the game plan.

Tech-Bank is the third listed pig farmer in China that has revealed reorganization plans since the down cycle of pork prices started two years ago. The first one was Zhengbang Technology, completing its reorganization late last year, whereas Aonong Biological Technology Group started such process last month.

The reorganization would optimize the structure of assets and liabilities and improve Tech-Bank's ability to maintain operations and profits, the company said, adding that if the plan fails, the firm risks bankruptcy.

Amid dropping pork prices, Tech-Bank has suffered from a great loss in its core business in the past three years. But restructuring is a worthy pursuit as the firm has a complete industrial layout and can maintain operations despite the overwhelming liabilities, it added.

For last year, Tech-Bank expects its net loss to tally from CNY2.6 billion to CNY2.9 billion (USD361.1 million to USD402.8 million), according to its forecast released in January. In 2022, the company still earned CNY489 million (USD67.9 million) in net profit.

As of Sept. 30, last year, China had four more listed companies in the sector with debt-to-asset ratios exceeding 70 percent. Those were New Hope Liuhe, Huatong Meat Products, Kingsino Technology, and New Wellful.

Editors: Dou Shicong, Emmi Laine