(CBN Global) March 23 -- Guangxi Nonferrous Metal Mining Group Co., a mining corporation managed by the State-owned Assets Supervision and Administration Commission, has filed for bankruptcy with debts totaling CNY14.5 billion (USD2.23 billion), CBN has learned. The crisis has had an impact on many Chinese financial institutions including the China Development Bank (CDB) and China's bond market.
The solvency crisis was revealed on June 5 last year when the company issued a warning concerning the repayment of one of its medium-term notes. In the end, repayment of the note was made with funding provided by the CDB. However, the company subsequently defaulted on the repayment of non-public debt-financing instruments maturing on November 5, 2015 and February 27, 2016, respectively.
The Guangxi government has pledged to reorganize the company in six months and seek strategic investors on a worldwide scale. The company has 108 creditors including the CDB, Shenwan Hongyuan Securities Group Co. [SHE:000166], Shanghai Pudong Development Bank Co. [SHA:600000] and Ping An Insurance Group Co. [SHA:601318]'s Ping An Bank. If all sides fail to reach an agreement, the company will be liquidated, in which case the unsecured debt-repayment rate will be less than 20 percent.
As the only large state-owned mining enterprise in Guangxi, Nonferrous Metal has a registered capital of CNY1,160,350 (USD179,00), 16 wholly-owned or controlled subsidiaries and six equity affiliates. The bankruptcy filing only involves the parent company, and the subsidiaries are operating as usual, CBN has been informed.