China’s Xining Special Steel Says Local Government Vowed Support

  • Firm says funds will be ready ‘soon’ for bond repayments
  • Investors have option to sell 1 billion yuan notes on June 15

Xining Special Steel Co., which missed a deadline this week for replying to an exchange inquiry about bond repayment risks, said local authorities pledged financing support if needed.

The company, whose products are used in the rail, automobile and energy industries, is seeking financing support from local banks, and funds will be ready “soon” for bond repayments, according to a Thursday statement posted to the Shanghai Stock Exchange in response to the bourse’s inquiry.

The firm, owned by the government of the western province of Qinghai, received inquiries from the Shanghai Stock Exchange on its bond repayment risk and other operation-related issues, it said in a May 19 exchange filing. The exchange cited a Bloomberg story that mentioned the firm’s upcoming debt deadlines. Investors have an option to sell 1 billion yuan ($152 million) of eight-year notes back to the company on June 15, according to Bloomberg-compiled data.

Xining Special Steel said in the Thursday statement that plans to issue private-placement bonds and shares are still in progress. The manufacturer said in January it planned to sell 5.2 billion yuan of shares in a private placement within six months of getting regulatory approval. The China Securities Regulatory Commission approved the sale on March 30.

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