Feb. 22 (Bloomberg) -- Shandong Helon Co., the fiber maker that was China’s first company to lose its investment-grade credit rating, said its Xinjiang unit reached an agreement to repay debts to Xinjiang Talimu Agriculture Development by handing over power plants and land.
The two plants, each with capacity of 15 megawatts, and the land they were built on will be used to repay 253 million yuan ($40 million) of borrowings, Shandong Helon said in a statement to the Shenzhen Stock Exchange yesterday. The assets will be valued by an independent asset appraisal institute and the unit will pay the balance with cash if they are priced at less than 253 million yuan, it said.
China Lianhe Credit Rating Co. downgraded its long-term rating on Shandong Helon to CCC from BB+, according to a statement posted on Chinabond website on Feb. 15, after cutting the grade four steps in December. The company has 400 million yuan of bonds coming due in April, according to data compiled by Bloomberg.
Shares of Shandong Helon have been suspended since August when the company said it had discovered a matter that may have a “relatively large” impact on its stock price and which hadn’t been disclosed. The company said in June the securities regulator had started investigating company on suspicion of violating the securities law.
--Feiwen Rong and Henry Sanderson. Editors: Nerys Avery, Joshua Fellman
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