LINE

Text:AAAPrint
Economy

Tianjin gov't-owned firm defaults on two trust loans

1
2018-05-02 13:48Global Times Editor: Li Yan ECNS App Download

Company missed payments worth 500m yuan amid crackdown on local debts

A Tianjin-based municipal government-owned real estate company has defaulted on two trust loans collectively worth 500 million yuan ($78.69 million), the second of such case in 2018 amid the central government's stricter rein on local government debts.

Tianjin Municipal Development Co missed repayments of a trust loan worth 500 million yuan that it had borrowed through two trust products issued by the Guotong Trust, according to an announcement the trust company posted on its official website on Sunday.

Tianjin Municipal Construction Development Co is a State-owned large-scale real estate company based in North China's Tianjin, whose businesses include real estate development, land consolidation and hotel services.

The company's shareholder, Tianjin Municipal Construction Group, is owned by the State-owned Assets Supervision and Administration Commission of the Tianjin Municipal People's Government, the local government's State asset regulator.

According to a report released by rating agency PengYuan Credit Service Co, the debt ratio of Tianjin Municipal Construction Group had reached 91.17 percent as of the end of 2016, so the group had relatively high debt repayment pressure, domestic news site the Securities Times reported on Tuesday.

The loans should have been paid before April 14, but Tianjin Municipal Development Co, the borrower, failed to pay the principal and interest on time and thus requested an extension, the statement read.

After negotiation, Tianjin Municipal Construction Development Co ensured that all loans would be repaid before June 29, 2018.

The missed payments were the second known default of the off-balance sheet borrowed by the local government.

In January, Yunnan State-owned Capital Operation Co, which is fully owned by the State asset regulator of the government of Southwest China's Yunnan Province, missed payments amounting to more than 900 million yuan that were issued by the Harbin-based Zhongrong International Trust in Northeast China's Heilongjiang Province, according to media reports.

The case at that time was closely being watched by people who were worried that China might be entering "a year of defaults" phase for off-balance sheet local government borrowings, said a Reuters report published in January.

China has increasingly cracked down on debt-raising activities led by lo cal governments in recent years.

At an annual economic conference held in December 2017, the Chinese government decided to take concrete measures to strengthen the regulation of local government debt in 2018.

In March, China's Ministry of Finance issued a regulation to further standardize the investment and financing behaviors of local governments and local State-owned enterprises.

  

Related news

MorePhoto

Most popular in 24h

MoreTop news

MoreVideo

News
Politics
Business
Society
Culture
Military
Sci-tech
Entertainment
Sports
Odd
Features
Biz
Economy
Travel
Travel News
Travel Types
Events
Food
Hotel
Bar & Club
Architecture
Gallery
Photo
CNS Photo
Video
Video
Learning Chinese
Learn About China
Social Chinese
Business Chinese
Buzz Words
Bilingual
Resources
ECNS Wire
Special Coverage
Infographics
Voices
LINE
Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
Copyright ©1999-2018 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.