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China’s Biggest Bicycle Exporter Might Face Bankruptcy

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SHANGHAI, China (Aug 16) – China’s biggest bicycle exporter, Shenzhen China Bicycle Co., has warned its shareholders it may be delisted because it is facing bankruptcy proceedings. If a bankruptcy application by its controlling shareholder, Huarong Asset Management Corp., is approved by the Shenzhen Intermediate People’s Court, the company’s shares will be delisted from the […]

SHANGHAI, China (Aug 16) – China’s biggest bicycle exporter, Shenzhen China Bicycle Co., has warned its shareholders it may be delisted because it is facing bankruptcy proceedings.
If a bankruptcy application by its controlling shareholder, Huarong Asset Management Corp., is approved by the Shenzhen Intermediate People’s Court, the company’s shares will be delisted from the Shenzhen Stock Exchange, China Bicycle said in a statement posted on the exchange’s Web site.
However, the company, based in Shenzhen, said it was seeking a resolution that would enable it to continue operations.
China is the world’s biggest bicycle exporter, with exports rising 7 % in the first half of this year to 28.6 million units. But the tariffs of almost 50 % on exports in key markets like the EU and Canada seem to have already taken their toll.
Despite strong overall growth in exports, Shenzhen China Bicycle has been struggling with debt for years. Huarong, a state-owned asset management company in charge of handling bad debts, took a controlling stake in 1999.
China Bicycle announced also that it had gained permission to sell one of its assets, a property in Shenzhen, to help pay off a US$1.35 million debt to the China Merchants Bank Co.

The South China Morning Post reported the company’s long-term debt totaled 532.8 million yuan (US$66 million; Eur 53 million) as of the end of last year.

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