SHANGHAI Dec 12 China City Construction
Holdings Group said late on Friday that one of its shareholders
had stepped in to pay interest on a local bond upon which the
construction company defaulted last week.
China City Construction Holdings Group, the unlisted Hong
Kong subsidiary of a mainland Chinese construction and
development, firm said in a statement earlier on Friday that it
could not make an interest payment December 9 on a five-year
It later issued another statement saying that Beijing MIC
investment Co., which owns a 51 percent stake in China City
Construction, would be willing to support the firm and make the
"The company has been affected by factors including
downgrading. Its ability to finance is limited, and it is not
able to make interest payments," China City Construction said in
the statement posted on the China Central Depository & Clearing
"But the company's shareholder Beijing MIC Investment
already has enough capital to pay," it added.
China City Construction said it would make additional
efforts to raise funds to pay off the principal and further
The bond's principal is 1.55 billion yuan ($224.20 million)
and it carries an interest rate of 5.68 percent.
Liquidity pressure is mounting on China City Construction,
which had difficulty in making on-time interest payments on
another set of medium-term notes in November.
Its troubles date back to April, when it first ran into
trouble after a change in ownership in its Chinese parent
company, China City Construction Holding Group Co, triggered an
early redemption clause for the 2.5 billion yuan ($376.51
million) offshore yuan bond maturing in 2017.
($1 = 6.9135 Chinese yuan renminbi)
(Reporting By Winni Zhou and Brenda Goh; Editing by Eric