China Shanshui Dollar Bonds Climb on Early Repayment PlanBloomberg News
China Shanshui Cement Group Ltd.’s dollar bonds due for repayment in 2020 climbed after the cement maker said it would repay them early, boosting investors’ confidence following a shareholder scrap.
China Shanshui plans to commence buying back the $500 million of outstanding notes by Jan. 19 after the tussle triggered early redemption, according to a statement Thursday. The company also intends to pay the principal of 2 billion yuan ($303.6 million) of onshore bonds that defaulted in November, said Zhao Yongkui, who was appointed as director of its Shandong unit on Dec. 3, in an interview Friday.
Investors hope the plans signal a path to normality as new bosses, backed by biggest shareholder Tianrui Group Co., seek to wrest control of the cement maker’s operations from founder Zhang Caikui. The dispute intensified this week as Shanshui’s Shandong unit, its main operating arm, said it filed a lawsuit against the parent company alleging it released “false and illegal statements.”
“We think it’s a positive sign that the new management is looking at getting banks’ financing, to allow Shanshui to operate as an ongoing entity,” said Nuj Chiaranussati, a Singapore-based credit analyst at Gimme Credit LLC. “Investors will need to monitor the viability of the cement business. The recent turmoil would have had a negative impact on its business and cash flow.”
Hong Kong-based China Shanshui’s 2020 dollar notes rose 2.1 cents in the dollar to 83 cents as of 3:43 p.m. in Hong Kong, according to prices compiled by Bloomberg. Shanshui expects to repay the notes at 101 cents on the dollar, according to its statement. The company is also considering making an offer to purchase its outstanding 8.5 percent senior notes due 2016, it said.
— With assistance by Judy Chen, and David Yong