YIHUA Enterprise Group, a large private Chinese furniture maker, defaulted on its debt on Thursday.
According to Reuters, Yihua Group said in an announcement on Thursday that the company had a cash flow crunch and failed to fully repay the interest of RMB 65 million on the maturing bond (the medium-term note “17 Yihua Enterprise MTN001”) as scheduled.
The 1 billion yuan bond, issued on May 2, 2017, has a coupon rate of 6.5% and a five-year maturity with annual interest payments. The interest payment default first occurred on May 6 last year, followed by another default on another $250 million of the company’s bonds.
Yihua Life, a listed company under the Yihua Enterprise Group, has previously been rumored to have suffered huge losses and financial fraud, and was delisted in March this year.
Since last year, there has been repeated news of large private companies defaulting on their debts in China. In December last year, it was reported that Ruyi Group, a large private company in Shandong, was unable to repay a RMB 1 billion bond.
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