(Yicai Global) April 26 -- Shares in electronics retailer GOME Retail Holdings tumbled today after home appliance maker Whirlpool China said it will no longer use a GOME subsidiary as a distributor over missed payments of more than CNY80 million (USD12.2 million).

GOME Retail’s share price [HKG:0493] tumbled 11.69 percent to trade at HKD0.34 (USD0.04) as of 2:30 p.m. China time today. Whirlpool China’s share price [SHA:600983] was trading down 0.97 percent at CNY7.13 (USD1).

Whirlpool China sent demand notices to GOME Appliance on April 24 and April 25 asking it to make the overdue payment immediately, the Hefei, eastern Anhui province-based firm said yesterday. GOME Appliance replied each time without making any promises.

There is no delayed goods payment, GOME Retail’s subsidiary, GOME Appliance said on its Weibo official account today, adding that Whirlpool China owes GOME Appliance CNY10 million (USD1.5 million) in various kinds of fees and that there have been over CNY20 million of unmarketable defective goods.

The management at Whirlpool China is chaotic and it has failed to fulfill its contractual obligations on a number of occasions, GOME Appliance said.

Whirlpool China has concerns over GOME Appliances’ ability to repay amid difficult market conditions and changes in the capital market, it said.

Although GOME Appliance has been a long-term partner of Whirlpool China, sales have been falling in the past few years. Last year, the Beijing-based retailer accounted for 1.61 percent of Whirlpool’s China sales at CNY79.6 million (USD12 million), down from 2.87 percent in 2019 with sales of CNY152 million (USD23.3 million).

GOME Appliance issued CNY3 billion (USD459 million) in corporate bonds in 2016, the parent firm said on Jan. 7. The first tranche of CNY937 million has been fully paid off, it added.

GOME Retail trimmed its losses by 37 percent last year from the year before to CNY4.4 billion (USD673.3 million) and revenue jumped 5.36 percent to CNY46.5 billion (USD7.1 billion), according to its latest financial report released on March 31. As of the end of 2021, it had about CNY4.4 billion in cash and cash equivalents, down from CNY9.6 billion a year before.

Editor: Kim Taylor