China bottle maker declares default on $100 mn bonds
A Chinese bottle supplier for Coca-Cola and PepsiCo said Tuesday it was unable fully to repay nearly $100 million worth of bonds, the latest default as growth slows in the world's second-largest economy.
Zhuhai Zhongfu Industrial Co. has 590 million yuan ($96.6 million) of bonds due on Thursday but will only be able to return a quarter of the principal, it said in a statement to the Shenzhen Stock Exchange, where it is listed.
China has seen several bond defaults from both private companies and state-owned enterprises in recent months as growth slowed to 7.0 percent in the first quarter, a low since the global financial crisis.
Zhuhai Zhongfu, whose main clients include US beverage giants Coca-Cola and PepsiCo, said it would be able to pay interest of 31.15 million yuan.
Premier Li Keqiang in March signalled that China was willing to accept some debt defaults, saying individual cases were "hardly avoidable" under economic restructuring.
Last month technology firm Cloud Live said it could not meet a 241 million yuan debt repayment, making it China's first company to default on corporate bond principal.
Shortly after that, a power equipment maker became the first state-owned firm to default on a bond payment in modern China, media reports said.
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