For the first time in the history of China’s state-owned company defaulted on its bonds – BBC

China Generating Company Baoding Tianwei Group, owned by China South Industries Group, is the first state-owned company in China, which defaulted on its bonds, according to Bloomberg .

The company has announced that it is not be able to pay interest on the bonds in the period, which expires on April 21. Nevertheless, the company intends to raise funds to repay the debt by all means, including the sale of assets. The amount of interest on the bonds of the company’s debt is estimated at 85.5 million yuan, or $ 13.8 million. The total amount of bonds issued was estimated at 1.5 billion yuan, or $ 242 million.

«Our company has suffered enormous losses in 2014, and the ratio of debt to assets has increased dramatically. We could not raise the money to service the debt, despite all efforts, “- said the company.

So far, defaults on the domestic stock market announced only private Chinese companies. Senior analyst at China Merchants Bank Liu Dongliang predicts that in the long term risks of default of Chinese state-owned companies grow, but rare cases should not be taken “for the signals of systemic problems».