(Yicai Global) Dec. 7 -- Shares in Muyuan Foods sank as much as 6.3 percent today despite the Chinese pig breeder saying that its subsidiaries will settle their unpaid loans soon as the slip up was mainly due to communication and technical issues. The company has plenty of cash in the bank and is operating as normal.

Muyuan’s share price [SHE:002714] was trading down 4.88 percent at CNY49.09 (USD7.71) at 12:30 p.m. China time today. Earlier in the day it had slumped to CNY48.34.

Thirty-two subsidiaries of the pork giant, including Shandong Zouping Muyuan Livestock and Liaoning Fuxin Muyuan Agriculture and Animal Husbandry, were among a list of companies named by the Shanghai Stock Exchange last month as constantly being in arrears.

As of yesterday, nine units still owed CNY7.6 million (USD1.2 million), Muyuan said. All other 23 subsidiaries have cleared their commercial acceptance bills. The firms failed to pay on time as they were not informed by holders of the bills that payments were due, or some of the payment details supplied were not accepted by the banks, it added.

The company had a cash balance of CNY9.9 billion (USD1.5 billion) in September and it is operating are normal, the Nanyang, central Henan province-based firm said. It will strengthen management and maintain close communication with lenders and bill holders to prevent this from happening again.

A number of commercial acceptance bills went unpaid in November. This can happen when staff forget to transfer the money on time, the company does not have enough cash or due to technical issues, the National Business Daily reported today, citing bill expert Wang Jian.

Editor: Kim Taylor