Caixin
Jan 04, 2023 09:31 PM
FINANCE

Debt-Plagued Local Financing Vehicle in China Gets ‘Unprecedented’ Extension to Repay Loans Within 20 Years

A Zunyi Road and Bridge Construction real estate development under construction in Zunyi, Southwest China’s Guizhou province. Photo: Daoqiao Group
A Zunyi Road and Bridge Construction real estate development under construction in Zunyi, Southwest China’s Guizhou province. Photo: Daoqiao Group

A troubled local government financing vehicle (LGFV) in Guizhou, one of China’s most indebted provinces, has secured approval from banks to delay repayment on 15.6 billion yuan ($2.3 billion) in loans by uniformly changing their term to 20 years.

Faced with mounting financial pressure, Zunyi Road and Bridge Construction (Group) Ltd. announced the debt restructuring agreement on Friday. The state-owned enterprise, the largest LGFV by debt load in the southwestern city of Zunyi, has long been instructed by the local government to raise funds to spearhead infrastructure and property investment.

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