- Company already remitted interest payment to bank account
- Payment of 74.4 million yuan in interest was due on Thursday
China Shanshui Cement Group Ltd. said interest on its 2017 notes can’t be distributed to bondholders because of the lack of a company seal, highlighting the challenges facing investors trying to get paid after a series of domestic bond defaults since November.
While the company has already remitted 74.4 million yuan ($11.4 million) of interest due Thursday on the 6.2 percent 1.2 billion yuan note maturing in 2017 to the bank account designated by China’s interbank clearing house, the money couldn’t be distributed because the company doesn’t have the seal of its main operating subsidiary Shandong Shanshui Cement Group Ltd., according to a Thursday filing by Hong Kong-listed company. The seal has already been made invalid, it said.
The announcement represents the latest chapter in China Shanshui’s difficulties taking control of the cement maker’s mainland operations from founder Zhang Caikui via a hostile takeover. The saga has prompted sharp moves in China Shanshui’s dollar bonds, with prices falling to as low as 63 cents on the dollar in November last year. They dropped again earlier this week after China Shanshui’s other main shareholders, China National Building Material Co. and Asia Cement Corp., decided not to proceed with their proposal to acquire the company.
China Shanshui said in January that it has obtained all seals except the one at Shandong Shanshui. Chinese companies need seals to institute management changes so they can be registered with the government. The seals were held by the ousted directors, who allegedly brought in gangsters to help them, China Shanshui said in a Dec. 31 filing.