China Railway Materials Seeks Debt Restructuring Amid Bond Halt

  • Firm met with 19 lenders on April 5, reported on conditions
  • More state-backed companies have stumbled in China debt market

China Railway Materials Co., a government-backed company that halted trading of its bonds earlier in the week, said Wednesday it’s seeking to restructure its debt.

The supplier of steel and cement for railways held a meeting with 19 lenders on April 5, according to a Wednesday company filing. China Railway reported on its operating and financial conditions in the meeting, the filing said, without giving details of the meeting result.

As Premier Li Keqiang pushes through reforms, many bloated state firms have stumbled in the debt market. Baoding Tianwei Group Co., a maker of electrical transformers, last year became the first government-backed company to renege on onshore bonds. Sinosteel Co. postponed a debt payment earlier this year.

China Railway Materials said in a Monday filing that it had suspended trading on its 16.8 billion yuan ($2.6 billion) of outstanding notes as it studies debt repayment issues. The firm had interest-bearing debt of 34.2 billion yuan and its debt-to-asset ratio was 87.8 percent at the end of September 2015, according to its filings.

The company has yet to release its 2015 annual results. Its suspended notes include 6.8 billion yuan of public bonds, all of which will come due before August this year, and 10 billion yuan of privately placed securities.

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