(XFN-ASIA) - Singapore-listed FerroChina said creditors have filed 169 lawsuits against its subsidiaries worth a combined 4.479 bln yuan.
The struggling galvanized steel producer said that a “majority” of the creditors have obtained court orders “to preserve and freeze the assets and properties of these subsidiaries” should the claims be successful.
The assets affected include plant machinery and inventories, fixtures and bank accounts, it said.
FerroChina said that it is still in talks with its creditors in an effort to restructure its debt, which forced the company to shut down a number of its facilities earlier this month.
The company closed down manufacturing operations in Changshu in east China’s Jiangsu province on Oct 9, saying that it was unable to repay or reschedule a portion of its working capital loans of 706 mln yuan.
It also warned that 4.5 bln yuan of additional debts could also be close to maturing.
FerroChina has since been in discussions with the local government of Changshu on a potential rescue deal that could involve swapping debt for equity. The government has also sought to persuade local banks to defer the company’s debt repayments.
Analysts said that the company had been struggling to resolve its debt problems for most of the year, but the downturn in steel demand has pushed the company to the brink of bankruptcy.
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FerroChina says creditors file 169 lawsuits, nearly 4.5 bln yuan claims
(XFN-ASIA) - Singapore-listed FerroChina said creditors have filed 169 lawsuits against its subsidiaries worth a combined 4.479 bln yuan.
The struggling galvanized steel producer said that a “majority” of the creditors have obtained court orders “to preserve and freeze the assets and properties of these subsidiaries” should the claims be successful.
The assets affected include plant machinery and inventories, fixtures and bank accounts, it said.
FerroChina said that it is still in talks with its creditors in an effort to restructure its debt, which forced the company to shut down a number of its facilities earlier this month.
The company closed down manufacturing operations in Changshu in east China’s Jiangsu province on Oct 9, saying that it was unable to repay or reschedule a portion of its working capital loans of 706 mln yuan.
It also warned that 4.5 bln yuan of additional debts could also be close to maturing.
FerroChina has since been in discussions with the local government of Changshu on a potential rescue deal that could involve swapping debt for equity. The government has also sought to persuade local banks to defer the company’s debt repayments.
Analysts said that the company had been struggling to resolve its debt problems for most of the year, but the downturn in steel demand has pushed the company to the brink of bankruptcy.
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