Shandong Ruyi in bond default
Shandong Ruyi, the Chinese group that controls, SMCP, Aquascutum, The Lycra Company and Gieves & Hawkes, has defaulted on two CNY1 billion/$153 million bonds. The privately-held company has been dealing with a massive debt load following a series of acquisitions in recent years.
Payment on the bonds had been due on Monday and Tuesday and Bank of Communications, the state-owned main underwriter of the first bond, said it would "supervise and urge" the company to pay what was owed.
It's not the first Chinese or international business that has defaulted on payments in the wake of the crisis caused by the pandemic.
But there have been concerns for some time about the massive debt Shandong Ruyi has built up during its acquisition spree. This has got in the way of some of its acquisition plans with tailor Bagir going under after Shandong pulled out of an investment deal. And it emerged this year that the 2018 deal for the firm to buy Bally from JAB Holdings has been abandoned.
Reports this week said Shandong had been hoping for a rescue deal from a local government financing vehicle. Jining Urban Construction Investment agreed to buy a 26% stake in it back in October 2019, but in June this year it said it was pulling out of that arrangement as such vehicles have come under government pressure to minimise risky investments.
Copyright © 2023 FashionNetwork.com All rights reserved.