(Yicai Global) Sept. 8 -- Dongbei Special Steel Group Co., a large Chinese state-owned mill caught in the throws of a debt crisis, said it is unable to repay a CNY300 million (USD45 million) bond on time, marking its eighth default this year.
Dongbei Special Steel missed the Sept. 6 maturity date for the three-year, 8.3 percent coupon note, the Dalian-based company said. The principal and interest of the bond total CNY324.9 million.
The steelmaker has faced difficulties as China's economy slowed. It has continued to operate at a loss, and it issued bonds with the help of underwriters a few months before the bond default. The firm's total debt load has reached about CNY5.1 billion (USD765 million). Neither the provincial government of Liaoning nor the company's controlling shareholder, the local State-Owned Assets Supervision and Administration Commission, have not come up with a solution.
Dongbei Special Steel floated the idea of a debt-to-equity swap that elicited strong objections from creditors. "The solution is far away from what we expect," one investor who attended talks on July 22 told Yicai Global.
Liaoning's SASAC is Dongbei Special Steel's largest shareholder with a 68.81 percent direct and indirect stake.