Sound Global at 50% Default Risk After Cash Shortfall, S&P Says

There’s a 50 percent chance that Sound Global Ltd. may default in the next six months after the water treatment company said auditors identified a cash shortfall and that it would miss a promised filing deadline, according to Standard & Poor’s.

Auditors found a discrepancy of about 2 billion yuan ($323 million) between Sound Global’s bank and book cash balances as of Dec. 31 while working on its 2014 earnings, according to a company statement Wednesday. Standard & Poor’s predicted in a report issued Thursday that there’s a 50 percent chance of default on the company’s dollar bonds before October.