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QINGDAO TODAY
在线翻译:
szdaily -> Markets -> 
Fertilizer maker on brink of bankruptcy rallies strongly
    2019-10-17  08:53    Shenzhen Daily

AN insolvency case in a remote city on the Tibetan Plateau shows that in China, most outcomes are better than getting booted out of the stock market.

A local court in Qinghai — a huge and sparsely populated province that’s home to the country’s largest lake — threw a lifeline to Qinghai Salt Lake Industry Co. when it accepted a creditor’s request to restructure the firm.

Stock investors took it as a sign the struggling Shenzhen-listed potash producer will survive: the shares are up 44 percent since the petition was filed in August.

It’s an example of how even a potentially dilutive deal — like a debt-to-equity swap — would be positively received by shareholders.

Qinghai Salt Lake is still a serious candidate for delisting after reporting net losses for two straight years, and the terms of its restructuring have yet to be announced.

“Stock traders are encouraged by the company’s progress on resolving its debt problems,” said Jiang Liangqing, a money manager at Ruisen Capital Management in Beijing. “They expect the restructuring to give it some breathing space and to reduce its debt burden.”

Calls to Qinghai Salt Lake’s media department seeking comment on the restructuring went unanswered. Qinghai Salt Lake hasn’t yet provided details of its plans — and there’s still the risk it could go bankrupt. Jiang said the company may be able to cut its debt load, delay payment or swap some of its debt into equities.

Defaults in China’s onshore bond market remain high in 2019, after a record year in 2018. Companies defaulted on almost 100 billion yuan (US$14 billion) in domestic bonds as of Oct. 14, following 120 billion yuan of defaults in 2018.

Qinghai Salt Lake has defaulted on three outstanding bonds amounting to about 6.2 billion yuan. It had assets of 73 billion yuan and total liabilities of 55 billion yuan as of the end of June, according to its half-year report. It posted a net loss of 424 million yuan for the period, after a 3.5 billion yuan loss in 2018. (SD-Agencies)

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