Continental Bond Market Continues To Thunder, Tianqi Lithium Has No Money To Pay Off Its Debt | Debt default | Default of state-owned enterprises | Bond market


[Epoch Times 14 novembre 2020 News](Epoch Times reporter Liu Yi reported) On Friday, November 13, Tianqi Lithium released an announcement saying that the company’s low liquidity situation has not substantially improved and there is no refund. The risk of principal and interest on the debt owed. The debt is $ 1.884 billion.

Based on mainland China media reports, Tianqi Lithium’s announcement showed it acquired Chilean Chemical Mining Company for $ 4.066 billion (approximately RMB 25.893 billion) in 2018. At that time, an agreement was signed with the syndicated loan, stipulating that the $ 1.884 billion loan would be due for repayment at the end of November 2020, representing 53.8% of the $ 3.5 billion syndicated loan. USD and 179.35% of the company’s most recently controlled net assets.

Although the company has formally submitted an application to adjust the loan term structure to the syndicate, it is currently under review. It’s on time.

Additionally, Tianqi Lithium said it will suspend interest payments on part of the M&A loans due in 2020 (for now, the cumulative amount of unpaid interest on syndicated M&A loans is approximately 471 million yuan).

In addition, Tianqi Lithium still has significant litigation, arbitration and related performance risks; the risk of building the project or achieving production below expectations and the risk that the controlling shareholder holds the lien rate of the company’s shares is too high.

As of November 10, 2020, Tianqi Lithium’s controlling shareholder, the Tianqi Group, has accumulated 354,983,500 pledged shares due within the next year, equal to 75.82% of its shares and 24.03% of the total capital. of the company, corresponding to the financing And the guarantee balance is RMB 3.194 billion.

According to the data, Tianqi Lithium is a Chinese lithium giant and a publicly traded company. Since its last closure, Tianqi Lithium has a market value of over 36 billion yuan. Mainly engaged in mining and selling lithium resources and producing lithium salt products.

The continental bond market declines and many state-owned companies go bankrupt

Recently, the continental bond market has been thundering: many bonds have lowered their limits one after another, at the same time bond defaults have increased and are AAA-rated state-owned enterprises.

On November 10, the large state-owned coal company Yongcheng Coal and Electricity Holdings Group defaulted on 1 billion bonds in China’s Henan province, shocking the industry. After the default, the group’s rating fell precipitously and bonds also plummeted. The net price of “18 Yongmei MTN001” fell by 94.61% on the 11th, and then fell again by 10.41% on the 12th; the net price of “20 Yongmei CP001” fell 93.15%.

Ziguang Guowei, another chip leader with a market value of 50 billion yuan, suffered four consecutive losses on November 13. In the morning, Ziguang Guowei opened significantly lower and hit the limit several times during the session, which at the close of midday still dropped nearly 9%, evaporating 5.5 billion yuan of market value in half a day. . From November 10-13, Unisplendour National Micro experienced a cumulative decline of nearly 20% and the evaporated market value exceeded RMB 13 billion. According to the company’s last 130,600 shareholders, the average household loss was nearly RMB 100,000.

On November 12, “16 Qingkong 02” issued by Tsinghua Holdings Co., Ltd. fell for 3 consecutive days, down 27.14%; Yunnan Urban Investment “19 Yuntou 01” fell more than 17% at one time, and fell 12.12% the same day; Pingdingshan Tianan Coal “13 Ping Coal Bond” fell for two consecutive days, dropping 9.65% on the day, Jizhong Energy “16 Jizhong 01” also fell continuously, dropping 8.14%.

On November 12, the transaction prices of several bonds, including Yongmei Holdings and Ziguang Group, deviated. The “16 Qingkong 02”, “18 Ziguang 04”, “19 Ziguang 01” and “19 Ziguang 02” bonds fell by approximately 30% and were temporarily suspended from the Shanghai Stock Exchange.

In addition to the decline in the bond market, corporate bond defaults have occurred from time to time.

In addition to Yongcheng Coal and Electricity Holding Group, the listed company * ST Gangtai “17 Gang Stock 01” failed to pay interest on time; “18 Huawen Media MTN001” and “17 of Huawen Media” Huawen Media MTN001 “subsequently renewed the principal and interest. Although there was no actual default, the principal and interest were not fully realized on time.

On October 23 and 24, state-owned Liaoning Brilliance Auto failed to redeem the “17 Huaqi 05” private placement bond owed with a balance of 1 billion yuan; on October 23, the two state-owned bonds Shenyang Shengjing Energy Development Group Co., Ltd. Shen Public PPN001 and 18 Shen Public PPN001) failed to repay the principal and interest in full on October 23, 2020 and were deemed in default by market.

Regarding the recent sharp decline in mainland bonds, Zhang Xu, chief fixed income analyst at Everbright Securities, said that in the recent period, the default of single AAA-level entities interrupted the previous order, which increased the cost. overall financing and bond market difficulties; and reduced The quality and effectiveness of financial institutions in support of the real economy.

On November 13, Guotai Junan’s strategy team released a research report stating that two AAA state-owned firms recently defaulted in the credit bond market, triggering a butterfly effect: Low-skilled entities accelerated their decline. Exposure to such credit risks highlights concerns about the qualifications of credit bond issuers.

Regarding the recent consecutive defaults of continental state-owned enterprises, commentator Wen Xiaogang said that state-owned enterprises that have been able to obtain preferential policies and loans from the authorities have also started to fail, indicating that the economic environment on the continent is it has deteriorated and that the local authorities of the Chinese Communist Party are financially tight and cannot afford to pay. Save these state-owned enterprises.

Responsible director: Liang Zi


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