According to a report by Reuters, China Shanshui Cement's top shareholder, the Tianrui Group, has announced that it will provide funds to the cash-strapped company to redeem a US$500 million global bond. The announcement has raised investor hopes that it may avoid defaulting on them.
China Shanshui is set the hold a general meeting on 1 December to decide on certain changes in the board of directors. The changes could trigger a contractual obligation to redeem the bonds that are otherwise due in 2020.
Tianrui Group is the biggest shareholder in China Shanshui Cement, owning 28.16% of its equity. China Tianrui's Chairman Li Liufa owns 70% of Tianrui Group.
The company has announced it hasn’t been able to find financing to repay RMB2 billion in onshore debt and will therefore default on the loan and its 2020 dollar securities.
The group has been wrangling with shareholders over board management for some time, and has announced it is struggling to repay approximately RMB2 billion in onshore debt.