China’s would-be Rosneft investor CEFC pledges unit’s stock for loans amid funding woe
In September 2017, CEFC Shanghai was 51.3b yuan in debt repayable within 12 months, had 33b yuan in outstanding long term interest-bearing loans, 20b yuan in cash and deposits, and 55b yuan in shareholders’ equity
CEFC Shanghai International Group, the principal subsidiary of troubled CEFC China Energy, has pledged close to a fifth of its holding in a Shenzhen-listed unit to back a 800 million yuan (US$126.4 million) loan – the latest sign the energy-to-finance conglomerate chaired by mysterious businessman Ye Jianming is under financial strain.
CEFC Shanghai handed over 245 million shares of CEFC Anhui International Holding to custodian Anhui province-based Hua’an Securities as guarantee for the loan, on March 5, CEFC Shanghai said in a filing posted on the web-site of interbank financial products settlement services provider Shanghai Clearing House.
The shares pledge, in favour of Hangzhou-based Wanxiang Trust, will last until June 6, and amounted to 17.7 per cent of CEFC Shanghai’s entire stake in CEFC Anhui. It means 31.9 per cent of the stake has now been pledged to lenders.
CEFC Shanghai owns 60.8 per cent of CEFC Anhui, which had a market capitalisation of 12.2 billion yuan on Friday and net profit of 368 million yuan in 2016.
“This shares pledge will not cause any major impact on the operation, financials and debt repayment capability of CEFC Shanghai,” it said.
The filing comes after a Reuters report last week said Shanghai-based CEFC China was preparing to pay annual interest of as much as 36 per cent for short-term funding, in a sign of a cash crunch faced by the company as authorities were closing in on its chairman, who was being investigated for suspected economic crimes.