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Shanghai courts rule to freeze China Huishan's assets
April 10, 2017 / 5:41 PM / 8 months ago

Shanghai courts rule to freeze China Huishan's assets

April 10 (Reuters) - China Huishan Dairy Holding Co Ltd said on Monday courts in Shanghai ruled to have the company’s assets frozen, following an application by a creditor of the troubled dairy firm.

The ruling is the latest blow for China’s largest integrated dairy firm after its shares were suspended from trading following an 85 percent plunge in a single day last month.

The company has also missed loan repayments and lost contact with a key executive in charge of its finances and cash.

China Huishan said Shanghai courts ruled to freeze assets worth 546.1 million yuan ($79 million) of the company, its controlling shareholder Yang Kai and his wife.

The ruling is in response to an application by Gopher Asset Management Co Ltd, one of the company’s creditors. A similar application by Gopher was rejected late last month by a Hong Kong court.

The diary firm also said on Monday it had received a letter from lenders alleging non-compliance with conditions under a $200 million debt facility. The lenders alleged that the company was in default.

Huishan, founded in 2009, grabbed headlines last year when it sold and leased back part of its herd, but its most recent troubles have laid bare risks of excess leverage and financial engineering in unexpected quarters of corporate China.

Huishan has been on the back foot since a December attack by U.S.-based short-seller Muddy Waters.

$1 = 6.8988 Chinese yuan renminbi Reporting By Justin George Varghese in Bengaluru; Editing by Sai Sachin Ravikumar

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