Shanshui Investors Vote to Oust Directors Including Chairman

  • Largest shareholder Tianrui had proposed board restructuring
  • Cement maker's dollar bonds rise to highest in three weeks

Investors in China Shanshui Cement Group Ltd., which defaulted on bonds last month after a shareholder dispute stymied financing, have voted to oust directors including Chairman Zhang Bin.

The resolutions passed with 96 percent in favor at an extraordinary general meeting held in Hong Kong Tuesday, EGM chairman John Robert Lees told reporters after the meeting ended. Shanshui’s $500 million of 7.5 percent notes rose 0.6 cent to 88.4 cents as of 5:39 p.m. in Hong Kong, the highest in more than three weeks, according to prices compiled by Bloomberg.

Shanshui failed to pay 2 billion yuan ($312.6 million) of onshore debentures in November, becoming at least the sixth Chinese firm to default in the local bond market this year. Tianrui Group Co., Shanshui’s biggest shareholder, said in a Nov. 17 filing it would lend funds if its proposed restructure of the cement company’s board occurs and triggers early repayment of Shanshui’s 2020 dollar securities.

China Shanshui Investment Co., another Shanshui shareholder controlled by ex-employee owners of the company’s stock, was likely to support Tianrui in Tuesday’s EGM, Ross Lee, credit analyst at Bank of China Hong Kong Ltd., had said Monday.

Tianrui controls 28.2 percent of Shanshui while CSI has a quarter. Shanshui’s two other major shareholders, Taiwan-based Asia Cement Corp. and state-owned China National Building Material Co., own 20.9 percent and 16.7 percent, respectively. ACC and CNBM, which had earlier considered terms of a general offer for Shanshui, said on Nov. 27 that they wouldn’t be attending the EGM.

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