Caixin
Nov 26, 2018 08:07 PM
FINANCE

In Depth: Rags to Riches Entrepreneurs Head for Inglorious Fall

Workers manufacture jewelry at a Neoglory workshop in Yiwu, Zhejiang province in 2010. Photo: IC
Workers manufacture jewelry at a Neoglory workshop in Yiwu, Zhejiang province in 2010. Photo: IC

Not all private companies are equal in the eyes of local governments, and that's unfortunate for thousands of businesses who hoped they'd be saved by the state-backed rescue plan now underway to bail out the struggling non-state sector.

Zhejiang province-based Neoglory Holdings Group Co. Ltd., is one of them. A classic rags-to-riches tale of a small-town private trader and manufacturer that branched out into property and finance, Neoglory is now facing a day of reckoning as its debt-fuelled expansion turns to bust. The company, which by its own admission is weighed down by 46.9 billion yuan ($6.76 billion) of liabilities, said on Monday that it had failed to repay principal and interest totaling 1.37 billion yuan on three separate bonds, and failed to honor payments related to two other bonds. Its revelation follows the announcement of 2.74 billion yuan of missed payments in September.

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