China's Heilongjiang Longdi shuts plants, sells $36m assets

14 October 2010 10:31  [Source: ICIS news]

SHANGHAI (ICIS)--Financially troubled Heilongjiang Longdi Company, the largest polyester producer in northeast China, shut down production in July and recently sold two-thirds of its fixed assets to a private company for yuan (CNY) 240m ($36.1m), sources close to the company said on Thursday.

It took the company more than a month to find a buyer for the assets that were put on the auction block - including production workshops, industrial lands and production equipment, the sources said.

Proceeds from the sale would be used to pay off the company’s soured loans, they said. The remaining third of the polyester firm’s assets had been mortgaged, said the sources.

The company owes the Heilongjiang branch of the National Development Bank CNY275m and had not been able to service the debt for three years, according to a local newspaper.

Heilongjiang Longdi has 170,000 tonne/year polyester capacity, sources said.

“It is still unknown whether the company will resume polyester production after the new owner takes over it,” one of the source said.

($1 = CNY6.65)

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