• 4 minutes USGS Announces Largest Continuous Oil Assessment in Texas and New Mexico
  • 10 minutes IT IS FINISHED. OPEC Victorious
  • 16 minutes GOODBYE FOREIGN OIL DEPENDENCE!!
  • 42 mins Paris Is Burning Over Climate Change Taxes -- Is America Next?
  • 18 hours The Great Climate Change Swindle
  • 5 hours End of EV Subsidies?
  • 9 hours Price Decline in Chinese Solar Panels
  • 6 hours Maersk's COO statment.
  • 2 hours Trump accuses Google Of Hiding 'Fair Media' Coverage of him
  • 1 day S. Australia showing the way
  • 20 hours China Builds LNG Icebreaker
  • 1 min EPA To Roll Back Carbon Rule On New Coal Plants
  • 1 day More OPEC Members May Leave
  • 23 hours Exxon buys green power.
  • 2 days Not only GM: Morgan Stanley Predicts Ford to Cut 25,000 Jobs in Overhaul
  • 1 day Feudalism: The Most Resilient System?
Is This The Next Disaster For Canadian Drillers?

Is This The Next Disaster For Canadian Drillers?

The Canadian oil industry can’t…

China CEFC Unit Defaults After Failed Rosneft Stake Acquisition

Rosneft storage

CEFC Shanghai International Group—a subsidiary of China CEFC Energy whose deal to buy 14 percent in Rosneft for US$9 billion collapsed earlier this month—said on Monday that it had missed payments on bonds worth US$327 million (2.09 billion yuan), in the latest bond default in China as the government steps up efforts to crack down on corporate debts and financial risks.

“There have been significant changes to the issuer’s production and operations, it has failed to raise funds in the amount required, and it is unable to repay principal and interest on [the bond] in time,” CEFC Shanghai International Group said in a statement posted on the website of the Shanghai Clearing House, as carried by Reuters.

CEFC Shanghai “will maintain close communications with investors and relevant intermediaries, and will handle relevant work following the default and continue to disclose its progress,” according to its statement.

In March this year, Chinese authorities started investigating the chief executive of CEFC China Energy, Ye Jianming, on suspicion of economic crimes. The investigation is part of a wider crackdown on private Chinese businesses after President Xi Jinping’s government warned that no Chinese billionaire, no matter how well-connected, is safe from scrutiny and investigation.

The investigation and troubles of CEFC China Energy raised concerns over the agreement it had signed to buy 14 percent in Rosneft from Glencore and Qatar Investment Authority (QIA).

Related: The Double-Edged Sword Of High Oil Prices

In early May, Glencore said that the Glencore-QIA consortium notified CEFC of the termination of the agreement, and the 14.16-percent stake in Rosneft that the Chinese company was to buy would be transferred to a wholly owned subsidiary of QIA. The Qatari investment vehicle will end up holding 18.93 percent in Rosneft and become its third-largest shareholder after the Kremlin and BP.

CEFC Shanghai’s bond default is likely to be just one of many among Chinese companies.

According to Fitch Ratings, the recent rise in corporate bond defaults and credit events in China “is likely to continue during the rest of 2018, amid tightened credit conditions.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
-->