Caixin
Nov 26, 2020 09:27 AM
CX DAILY

CX Daily: State-Owned Coal Mining Company Gets 9-Month Reprieve to Repay Defaulted Bonds

Yongcheng Coal has 7 billion yuan of additional bonds and its parent has 2.5 billion yuan of bonds due in the first half of 2021.
Yongcheng Coal has 7 billion yuan of additional bonds and its parent has 2.5 billion yuan of bonds due in the first half of 2021.

Defaults /

Yongcheng coal gets nine-month reprieve to repay defaulted bonds

Chinese state-owned coal mining company Yongcheng Coal and Electricity Holding Group Co. Ltd. dodged a bullet and avoided triggering defaults on billions of yuan in debt as creditors agreed to concessions on 1 billion yuan ($152.4 million) of bonds that were due Nov. 10. Now Yongcheng is seeking extensions on other debt.

At a meeting hosted Monday night by underwriters China Everbright Bank and Zhongyuan Bank, Yongcheng Coal bondholders unanimously agreed to accept a 50% payment of principal and to extend the balance of principal and interest by 270 days, according to a statement posted Tuesday by Shanghai Clearing House.

The extension will avoid triggering cross-protection clauses on 15 billion yuan of Yongcheng Coal bonds and 11.5 billion yuan of debt issued by its parent company, Henan Energy and Chemical Industry Group Co. Ltd. Under the cross-protection clause, if Yongcheng couldn’t repay the principal on its 1 billion yuan bond by Tuesday, the default would trigger defaults of the parent’s bonds.

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FINANCE & ECONOMY

1

In 2019, nearly one-third of trusts were punished by regulators for a range of violations.

Trusts /

China tightens rules for scandal-hit trust sector amid campaign to contain risks

China overhauled regulations governing the country’s $3 trillion trust industry, tightening oversight to help contain financial risks in a key area of the shadow banking sector that has become of increasing concern to authorities after a series of scandals and defaults.

The new rules, which will take effect Jan. 1, represent the first significant update of trust regulations since June 2015. They stipulate stricter requirements for shareholders and managers of trust companies and tighten standards for those allowed to conduct investment business, according to a statement released Tuesday by the China Banking and Insurance Regulatory Commission (CBIRC). They also relax criteria for overseas financial institutions to invest in the sector and enhance corporate governance obligations.

China-EU /

Xi vows to push forward conclusion of China-EU investment pact

Chinese President Xi Jinping vowed to reach an investment deal with Europe this year that will give European businesses greater market access in China.

“We hope that Germany and the European Union will remain open to Chinese companies,” Xi told German Chancellor Angela Merkel Tuesday during a phone conversation, according to the official Xinhua News Agency. Xi made the remarks days after the G20 summit.

Merkel congratulated China on signing the Regional Comprehensive Economic Partnership (RCEP) with 14 other Asia-Pacific countries and said she hoped to “put in more effort” to conclude the investment deal between the European Union and China, Xinhua reported.

Trade /

China blacklist strands more than 50 ships with Australian coal

More than $500 million of Australian coal is on ships anchored off Chinese ports as a diplomatic spat between the two countries cuts into trade, idles a portion of the world’s dry bulk carriers and threatens to spiral into a crisis.

More than 50 vessels have been waiting a month or longer to offload coal from Australia, according to separate analyses of shipping data conducted by Bloomberg and data intelligence firm Kpler. There are about 5.7 million tons of coal and approximately 1,000 seafarers on the anchored vessels.

Pension fund /

Chinese pension fund return shatters records

Chinese pension funds entrusted for investment achieved a 9.03% return rate last year, the highest since 2016, according to data (link in Chinese) released Tuesday by the National Council for Social Security Fund (NCSSF).

Local governments began to entrust their outstanding pension funds to the NCSSF for investment in 2016. By the end of December, 22 provincial-level regions had entrusted a total contract value of nearly 1.1 trillion yuan ($719 billion), surpassing the threshold of 1 trillion yuan for the first time on record, the data show.

Quick hits /

Wang Tao: China’s GDP will grow 8.2% in 2021

China and Japan agree to restart two-way travel by end of November

BUSINESS & TECH

INDIA

India banned 43 more Chinese apps Tuesday, bringing the total of prohibited Chinese apps in the country to 267.

Apps /

China calls for fair treatment after India’s latest ban on Chinese apps

The Chinese government urged India to level the playing field after New Delhi added dozens more names to its list of banned Chinese apps as bilateral relations remain cold after border clashes earlier this year.

India’s Ministry of Electronics and Information Technology issued a statement Tuesday banning 43 apps, including several operated by Alibaba Group Holding Ltd. such as global retail marketplace AliExpress and workplace collaboration software DingTalk. That brought the total number of banned Chinese apps in India to 267.

“This action was taken based on the inputs regarding these apps for engaging in activities which are prejudicial to sovereignty and integrity of India, defense of India, security of state and public order,” the ministry said in the statement. It said it issued the order “based on the comprehensive reports received from Indian Cyber Crime Coordination Center, Ministry of Home Affairs.”

IPO /

JD unit seeks up to $3.5 billion in Asia’s biggest health IPO

JD Health International Inc. is looking to raise as much as $3.5 billion in its Hong Kong initial public offering in what would be Asia’s biggest health-care listing on record.

The health-care unit of China’s No. 2 e-commerce giant JD.com Inc. is selling 381.9 million shares at HK$62.8 to HK$70.58 each, according to terms of the deal obtained by Bloomberg News. The price range values JD Health at $25.3 billion to $28.5 billion.

JD Health secured six cornerstone investors for its IPO who agreed to subscribe for as much as $1.35 billion of stock, including Singapore sovereign wealth fund GIC Pte, Hillhouse Capital and BlackRock.

Security threat /

ZTE’s designation as security threat affirmed by U.S.

The U.S. Federal Communications Commission affirmed its decision to designate ZTE Corp. as a national security threat over concerns telecommunications gear made by the Chinese company could be used for spying.

The action shows that the FCC remains determined to drive ZTE and fellow Shenzhen-based manufacturer Huawei Technologies Co. from the U.S. market, where small rural carriers rely on their cheap network equipment. The agency at its Dec. 10 meeting is to consider rules for listing prohibited gear, FCC Chairman Ajit Pai said in a Nov. 18 blog post that identified Huawei as a threat.

The FCC has said ZTE and Huawei pose a risk of espionage, an allegation each company denies. The agency has increasingly scrutinized Chinese companies. It is considering banning three Chinese telephone companies and last year barred China Mobile Ltd. from entering the American market.

Livestreaming /

China takes aim at underage splurging on livestreamers

Livestreaming companies will be forced to cap the amount that users can spend on their favorite performers as part of new rules that also stop minors and those who have not undergone “real name registration” from spending money on the platforms.

The latest rules (link in Chinese), unveiled Monday by the National Radio and Television Administration, appear to aim at stopping underage users from overspending on cash tips for livestreamers. However, they could come at the cost of cutting into the lavish gift-giving that underpins the industry, which has experienced explosive growth this year as a pandemic-induced lockdown and travel restrictions pushed more eyeballs online.

Under the rules, which took effect immediately, livestreaming platforms will need to verify the age and identity of livestreamers and those who patronize them. People found to be under the age of 18 will not be able to send virtual gifts or give tips, the regulator said in a notice.

Quick hits /

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