(Yicai Global) June 9 -- Zhengbang Technology’s shares plunged after the leading Chinese hog breeder and its 10 affiliates reportedly failed to repay CNY542 million (USD81 million) of commercial acceptance bills due to a cash squeeze after pork prices fell.

After sinking as much as 8.5 percent earlier today, Zhengbang [SHE: 002157] ended 7.3 percent down at CNY5.70 (84 US cents). The stock has fallen over 40 percent since the start of the year.

Zhengbang has pledged to arrange the debt’s gradual repayment with creditors, Shanghai Securities News reported yesterday, citing an executive at the Nanchang-based company.

Last month, Zhengbang had sales of CNY700 million, a 9 percent drop on April and down about 80 percent from a year earlier. At 749,700, the number of pigs the firm sold last month declined 18.4 percent from April and over 54 percent from a year ago.

Because of rising costs and lower pork prices, the company lost CNY2.4 billion (USD359.4 million) in the first quarter, after reporting a CNY18.8 billion (USD2.8 billion) net loss for last year. Cash on hand plunged to CNY3.1 billion at the end of 2021, compared with CNY13 billion the year before, while its liability ratio surged to over 97 percent from 69 percent.

Zhengbang announced two days ago that it plans to repurchase CNY1.6 billion of convertible bonds issued in 2019, with payment made on June 23. That means the company faces an even larger debt payment this month after defaulting on the commercial acceptance bills.

Editor: Futura Costaglione