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Company confirms China's first corporate bond deposit default

Xinhua, April 6, 2015 Adjust font size:

A listed Chinese restaurant company confirmed a landmark default on a corporate bond due Tuesday, marking the country's first case of deposit payment default of publicly issued bonds.

The Cloud Live Technology Group Co., Ltd., formerly Beijing Xiangeqing Group, which primarily provides Hunan, Guangxi and Guangdong cuisines, confirmed Monday they were unable to pay due deposits and interests of a corporate bond due on April 7, with a shortfall of 241 million yuan (39.3 million U.S. dollars), according to the company's announcement on the Shenzhen Stock Exchange.

The company said it would continue to raise money from third parties through credit financing.

The trustee firm, Guangfa Securities, will take responsive action in line with related regulations to protect investors' interests if the default continues unsolved after 30 working days.

The company suspended trading in its Shenzhen-listed shares last Tuesday and will continue the suspension until the problem is solved, according to the announcement.

Shanghai Chaori Solar, a domestic solar panel maker, failed to meet an interest payment on one billion yuan's worth of bonds last March. A state-owned bank later bailed it out and prevented what would have been China's first domestic bond interest default. Endi