China Railway Materials to Make Bond Payment, Plans Asset Salesby
State-backed firm to pay 1 billion yuan 4.4% notes due May 17
Company plans to offload assets including coal transport stake
China Railway Materials Co., a government-backed company whose bond trading halt last month contributed to a sell-off in the nation’s domestic debt market, said it will make a note payment due next week.
The supplier of steel and cement for railways plans to sell assets including a stake in a coal transport project by year-end to meet obligations, it said in a statement to the Shanghai Clearing House website. It will also speed up cash collection including overdue account receivables and seek financing. The firm will pay its 1 billion yuan ($153.4 million) of 4.4 percent notes that mature May 17, it said in a separate statement.
The company is one of the latest state-owned enterprises to attract speculation on its debt-payment abilities after Premier Li Keqiang vowed to reform bloated government-backed firms. Baoding Tianwei Group Co., a maker of electrical transformers, last year became the first state company to renege on onshore bonds. Sinosteel Co. postponed a debt payment earlier this year.
China Railway Materials has 16.8 billion yuan of outstanding notes and total interest-bearing debt of 34.2 billion yuan, it said in an April 11 statement. It is seeking to restructure its debt and held a meeting with 19 lenders on April 5, it said in an April 13 filing.
Chinese authorities are accelerating a draft plan to deal with “zombie companies” and cut overcapacity, the China Securities Journal reported Tuesday without saying where it got the information.