Another Chinese SOE warns of possible default
A second state-owned-enterprise in China has warned that it may default on debts due to being sued by a creditor. Yesterday China Erzhong said that it may have to stop paying interest on a RMB 1 bn (US$157 million) medium term note. Were this to occur it would be the second time a Chinese SOE has defaulted this year; power equipment manufacturer Baoding Tianwei Group went into default in April.

An investor in front of an electronic board showing stock information at a brokerage house in Shanghai, September 2, 2015.

China National Erzhong Group, a state-owned manufacturer of heavy machinery, has warned that it may have to stop paying interest on a Rmb 1 billion (US$157 million) medium term note after being sued by a creditor.

A default would be the second by a Chinese state-owned company in the interbank bond market following that of power equipment manufacturer Baoding Tianwei Group in April.

China Erzhong said in a statement that one of its creditors, First Design & Research Institute MI China, had taken it to court to force a debt restructuring on the ground that the company was unable to pay debt and could not be liquidated.