BL: China Milk Defaults on Shortage of Foreign Currency
China Milk Defaults on Bond Redemption, Seeks Talks (Update1)
By Lars Klemming and Katrina Nicholas
Feb. 12 (Bloomberg) -- China Milk Products Group Ltd., a supplier of raw milk and dairy cow embryos, said it’s defaulting on some repayment obligations because it hasn’t enough money outside China to pay for early redemption of its bonds.
“The company is currently exploring different options with a view to meeting its funding requirements,” according to a filing with Singapore’s stock exchange today. The notes are China Milk’s $150 million of zero coupon convertible bonds due 2012 and issued in January 2007.
China Milk said Jan. 5 it had received “valid put exercise notices” from holders of about $146 million of the notes and was “awaiting clearance” from China for the remittance of $170.56 million so it could make the required payments. The delay was “administrative and procedural in nature.”
China Milk said in today’s filing that it will try to work out an agreement with bondholders.
“Any remittance of funds out of China entails a series of procedural steps and regulatory clearances in respect of which the company is currently unable to gauge the length of such a process,” the statement said.
Daqing-based China Milk also said it hadn’t appointed any legal advisers at this stage. China Milk said Feb. 1 its Chief Financial Officer, Choi Ho Yan, 33, resigned to “pursue other career interests.”
Trade in the company’s shares was halted on Feb. 9. The stock has fallen 30 percent this month.
To contact the reporters on this story: Katrina Nicholas in Singapore on Knicholas2@bloomberg.net; Lars Klemming in Singapore at lklemming@bloomberg.net
Last Updated: February 11, 2010 22:16 EST
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