Skip to content
Subscriber Only

A China Borrower’s $11 Billion Debt Mountain Comes Crashing Down

  • Wintime Energy’s debt quadrupled in less than five years
  • Company’s flop likely to be echoed as deleveraging rolls on
Video player cover image

July 13 Report: China Default Storm Sends Dollar Junk Bond Yields to 2015 Highs

Updated on

China this month recorded one of its biggest corporate-debt defaults yet, with the downfall of a coal miner that had ridden the country’s wave of credit until policy makers changed the game with their deleveraging campaign.

For investors in Wintime Energy Co., it’s been far from a winning time now that the company from northern Shanxi province is proving incapable of rolling over debt that quadrupled in less than five years. How the borrower ran up a 72.2 billion yuan ($10.8 billion) tab that it now can’t make good on illustrates why this year will be China’s worst yet for corporate defaults. And with a potential lifeline from state-owned banks unveiled Wednesday, it could also emerge as an example of China’s unwillingness to allow unbridled corporate failures.