Oil giant CEFC China faces more woes with creditors at the door and Russian oil deal collapse
Boss Ye Jianming is still missing and credit rating downgrades are making it harder to raise cash
Troubled energy conglomerate CEFC China has had another tough week, with boss Ye Jianming still missing, creditors demanding payment, and its deal to buy a 14 per cent stake in a Russian state oil firm collapsing.
Chinese rating agencies have meanwhile been cutting the company’s rating, making it harder for CEFC to raise money as creditors jostle to sue the company to secure assets. China Lianhe Credit Rating downgraded its main corporate vehicle, CEFC Shanghai, by a notch to BBB+, the third time in two months following cuts on April 9 and March 1. China Chengxin International Rating has also downgraded CEFC’s creditworthiness three times in the last two months, with the latest cut on May 2.
The embattled firm is facing an army of creditors, with dozens of representatives of institutions that have bought CEFC bonds attending an investor meeting at a Shanghai hotel on Friday, demanding financial information and debt repayment guarantees, China Business News reported.
Two more bond investor conferences are scheduled, on Monday and May 15, according to the underwriters of the bonds, with a batch of 2 billion yuan (US$314.4 million) worth of CEFC bonds due to mature on May 21.
CEFC Shanghai said in a corporate filing on May 2 that a court had frozen all of its shares in listed subsidiary CEFC Anhui. It said those shares had been used as collateral to borrow from different creditors, whose combined claims were more than seven times its actual holdings.
The South China Morning Post reported earlier that the Shanghai municipal government had attempted to take over the energy conglomerate via state-owned Shanghai Guosheng, but the investment and financing firm pulled out after reviewing CEFC’s financial situation.
