(Yicai Global) June 4 -- Investors in China's Luwa Technology Industrial Group are eager to restructure the firm after the daily chemicals maker and two subsidiaries, all of which combine to hold assets worth CNY11.2 billion (USD1.6 billion), filed for insolvency due to debt troubles.

The Beijing-based group, which had net assets of CNY5.1 billion as of the end of last year, still has potential and an investment plan is under negotiation, the National Enterprise Bankruptcy Information Disclosure Platform said on June 2, citing the firm's filing. The first unit, Beijing Shuangwa Diary, had net assets worth CNY407 million (USD58.9 million) at a ratio of 27.9 percent while Beijing Lova Daily Chemical had CNY1.3 billion in net assets, or 39 percent of its total assets.

The application comes on the back of a multi-year overseas spending spree, during which Luwa picked up an 80 percent stake in American personal care products maker Panrosa Enterprises and a 77.3 percent share of France's Le Chatelard 1802 to expand its daily chemicals business. It also picked up CNY1.6 billion worth of land from eight French companies for coarse grain and flour production to contribute to its food-related operations.

Reward Group is not technically insolvent but its coffers are in dire straits, according to the application. By the end of 2018, the three firms' book capital was about CNY477 million yuan, but most of that was tied up as a bank loan guarantee. It would be unable to get a fair price -- and still unable to pay off its debts -- if it shed assets in a hurry, it added.

The group, which also engages in the tourism real estate sector, reportedly defaulted on its corporate bonds three times in the first quarter, being unable to repay the initial capital received through three tranches of bills.

Editor: James Boynton