Huishan Dairy Hit With Default Claim From HSBC
April 10 2017 - 11:26PM
Dow Jones News
By Chester Yung
China Huishan Dairy Holdings Co. (6863.HK) said HSBC Holdings
PLC (0005.HK) has claimed that it is in violation of the terms of a
US$200 million loan agreement.
The troubled milk producer said in a Monday night filing with
the Stock Exchange of Hong Kong that it received a letter from HSBC
on Friday which alleged noncompliance with some of the loan deal's
covenants.
As such, HSBC has "called events of default" regarding the
18-month-old agreement, which was fully drawn on. There is US$180
million and 156 million Hong Kong dollars (US$20 million) currently
outstanding on the loan.
"The company is taking legal advice" on the letter, said
Huishan.
The firm, whose stock has been suspended since March 24 after
tumbling 90% in minutes that day, also said in the filing that
Gopher Asset Management has obtained an order from a Shanghai court
to freeze assets of six Huishan units involving a combined 546.1
million Chinese yuan (US$79.2 million).
The asset management company had applied to freeze Huishan
assets in Hong Kong and assets owned by Chairman Yang Kai and his
wife but this application had been rejected.
The company has been in tumult after a co-owner, who was also a
company executive in charge of Huishan's treasury and cash
operations, went missing several weeks ago after saying she needed
to step away from her duties. The firm's independent board of
directors all departed at the end of March.
Write to Chester Yung at chester.yung@wsj.com
(END) Dow Jones Newswires
April 10, 2017 23:11 ET (03:11 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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