State-owned Chinese steelmaker Dongbei Special Steel GroupCo. failed to repay an 852 million Chinese yuan bond with interest, due March28, after its chairman died last week, London's Financial Times reported March 29.
The debt was underwritten by China Development Bank, whichsaid Yang Hua's death — reported as a suicide to the police — factored into thedefault.
Separately, the company may be unable to repay a 90-daycommercial bill for about 1.02 billion yuan, the FT added citing an announcement on the Shanghai Clearing Housewebsite.
China's central government has about a 100 billion yuanunemployment fund as part of its drive to curb overcapacity in the coal andsteel sectors by closing nonperforming enterprises, according to the report.However, the funds will not help Chinese firms pay off surging debt burdens.
"Every time they need help they ask for money, but itwill soon run out and then they will need more money again," the FT quoted Xu Zhongbo from Beijing metalConsulting as saying.
Citing data from China's National Bureau of Statistics, thereport added that coal and steel sector debt amounts to 8 trillion yuan andone-third of the figure is bank debt.
As of March 28, US$1was equivalent to 6.48 Chinese yuan.