China Shanshui weighs up fundraising options following default

China Shanshui weighs up fundraising options following default
Published: 17 November 2015

China Shanshui Cement says it is exploring a range of option to raise funds after defaulting on a CNY2bn (US$3.36m) bond last week.

The options include issuing new shares to existing or other investors, restructuring part of its assets and securitising some of its assets by creating mortgages, the company said in a filing to the Hong Kong Exchanges & Clearing on Monday.

“Each of these proposals is for the purposes of allowing the group to raise finance so it can repay the debt the group owes to its creditors both in and outside of China,” it said.

“If the Cayman Court grants the application and appoints joint provisional liquidators (JPLs), the JPLs will have the right to choose and implement one of these proposals or another proposal for the purposes of repaying the group’s debt.”

Shanshui failed to meet repayment obligations arising from CNY2bn last Thursday, and filed a petition to the Cayman Court to appoint provisional liquidators to help it devise a restructuring plan. A hearing is scheduled to be heard on Wednesday.

The company has been mired in a shareholder fight for control since April. Its largest shareholder Tianrui International Holding Co. has been trying to change Shanshui’s board. Meanwhile its two other shareholders China National Building Material Co and Taiwan’s Asia Cement Corp have announced they are considering the terms of a possible offer.