TRADING in Zhuhai Zhongfu Enterprise Co.’s corporate bonds was suspended temporarily yesterday by the Shenzhen Stock Exchange.

    Zhuhai Zhongfu, a plastic bottle maker for Coca-Cola and PepsiCo, said in a statement that trade in the bonds was suspended ahead of an announcement by the firm. It didn’t say when trade in the bonds would resume or when it would make the announcement.

    The news is likely to create more nervousness among investors, who are increasingly worried that financially weak private firms will have difficulties in paying back their debt after the first bond default onshore when solar-energy firm Shanghai Chaori Solar Energy Science & Technology Co. failed to meet interest payments on its bond in early March.

    Zhuhai Zhongfu, which earlier forecast losses of 1.08 billion yuan (US$174 million) to 1.17 billion yuan in 2013, already faces the prospect of longer-term suspension after it releases its 2013 annual report April 30. However, the bonds will have a chance to resume normal trading if the company swings back to net profit in 2014.

    According to China’s rules, trading in a company’s bonds face suspension if a firm reports losses for two years in a row.

    Zhuhai Zhongfu issued a 590 million yuan, three-year bond in May 2012 with a coupon of 5.28 percent. The bond’s rating was downgraded to AA minus from AA in June 2013. (SD-Agencies)