November 16, 2015 / 1:26 PM / 2 years ago

China's Sinosteel extends bond redemption date for second time

BEIJING/SHANGHAI, Nov 16 (Reuters) - China’s state-owned Sinosteel said on Monday it has extended the date investors can start redeeming its bonds by a month until Dec. 16, the second extension since October.

This second extension comes after Sinosteel had asked bondholders of its 2 billion yuan October 2017 bonds not to exercise a put option on Oct. 20, because the company would not be able to make a full payment, according to a letter seen by Reuters last month.

The new extension would give investors in the debt issued by subsidiary Sinosteel Corp Ltd more time to review the matter, the company said in a statement posted on the website of one of the country’s main bond clearing houses.

In the statement, Sinosteel again offered shares of its Shenzhen-listed subsidiary Sinosteel Engineering & Technology Co Ltd as additional collateral for the debt, as an inducement for bondholders to stay invested.

Sinosteel said it is negotiating the plan with related parties.

Today’s statement contained no additional information on repayment of scheduled interest due to bondholders. If Sinosteel is determined to have formally defaulted, it would be the first Chinese company to do so on a so-called enterprise bond, typically issued by large state-owned enterprises.

Several Chinese firms have defaulted this year following the first default in 2014 by Chaori Solar. These include state-owned Baoding Tianwei, a power equipment firm, and Cloud Tech Live, a food producer which tried to reinvent itself as an Internet company.

Reporting by Paul Carsten and Nathaniel Taplin, editing by William Hardy

Our Standards:The Thomson Reuters Trust Principles.
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