(Yicai Global) Sept.30 – Liaoning's provincial government is to restructure and reorganize Dongbei Special Steel Group Co., Ltd. is mired in a debt crisis. Fushun Special Steel Shares Co., Ltd. [SHA:600399], a subsidiary stressed on the Shanghai stock exchange's website it is not involved in the bankruptcy of its troubled parent and its operations and capital flows are normal.
Dongbei Special Steel Group Co., Ltd. is a large-scale regional state-owned steel company that has been faced with difficulties in operation against the backdrop of the slowdown of China's economic growth.
Since May this year, the company has been in nine separate bond defaults of CNY5.8 billion (USD869 million). It has also been involved in a protracted struggle with creditors on how to restructure the debt.
The Liaoning provincial government has decided to impose bankruptcy and reorganization on Dongbei Special Steel with the specific plans to be implemented at the end of September.
The 35.22 percent stake held by Dongbei Special Steel of Fushun have been frozen.
Dongbei Special Steel is controlled by the State-Owned Assets Supervision and Administration Commission of Liaoning province, which is the company's largest shareholder. Other shareholders include Liaoning State-Owned Assets Management Co., Heilongjiang province's SASAC and China Orient Asset Management Corp. The company is the largest special steel enterprise in Northern China directly managed by Liaoning province's SASAC.