Repeated Defaults by China Industrial Firm Spark Contagion Fears
- Xiwang juggles $1.4b debt load amid yuan bond default in Oct
- Shandong’s private firms see bonds plummet on default news
The latest bond default by a Chinese industrial group at the epicenter of a regional debt storm is escalating concerns about a cluster of private firms entangled in risky financing. Shandong-based Xiwang Group Co., which failed to make good on a delayed repayment on a local bond, is scrambling to refinance and avoid deeper trouble after triggering cross-default clauses on other bonds.
A corn oil and steel processor founded in 1986, Xiwang Group traces its roots to a small business from an impoverished village. It has since grown into a prominent local private conglomerate that also has a presence in logistics, property and trade. Based in Zouping county in the eastern Shandong province, the group controls three listed companies: Xiwang Foodstuffs Co., Xiwang Special Steel Co. and Xiwang Property Holdings Co.