China’s Dangdai does not make interest payment on 9¼% notes due 2022 within grace period

By Wendy Van Sickle

Columbus, Ohio, June 16 – Wuhan Dangdai Science & Technology Industries (Group) Ltd. subsidiary Dangdai International Investments Ltd. did not make the interest payment on its $200 million of 9¼% guaranteed notes due 2022 (ISIN: XS2408455553) that was due on May 16 within the 30-day grace period permitted by the indenture, according to a notice.

The non-payment caused an event of default under the notes. As a result, holders of the outstanding notes may demand immediate repayment of the principal and accrued interest. The company said as of Thursday it had not received any notice regarding acceleration action by holders of the 2022 notes, and no event of default has occurred in respect of any of its 10½% notes due 2023 or its 9% notes due 2023.

The company said during the second half of 2021, there were dramatic changes to the Chinese high-yield sector. Reduced bank lending and other forms of financing resulted in reduced access by companies to onshore capital.

In addition, the macro-economic environment and the Covid-19 pandemic and containment policies have had a material adverse effect on real estate, culture and tourism sectors where the group operates its business, resulting in the group’s ability to generate cash flow from operations to satisfy debt obligations being significantly undermined.

The company said it is likely to come under continued pressure to generate sufficient cash flows to meet its obligations and intends to communicate actively with its creditors to address its liquidity issues.

Based in Wuhan, China, Dangdai is a conglomerate with a substantial medical and pharmaceutical portfolio.

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