Bloomberg reported:
China Forestry Holdings Co., a timber producer backed by private equity firm Carlyle Group LP, faces a payment deadline on its U.S. dollar bonds today as it seeks more time to audit its books and complete a debt buyback.The Hong Kong stock exchange suspended trading China Forestry’s stock in January 2011. China is the wild, wild east for investment and product safety. A bond default won't kill Chinese infants, unlike toxic baby formula (another Carlyle investment - Yashili). China Forestry is more like spilled milk, that soured KPMG and Carlyle's reputations.
The company must pay the overdue half-yearly 10.25 percent coupon on $180 million of November 2015 securities to avoid a default, according to a May 16 Hong Kong stock exchange filing. A one-month grace period expires today. China Forestry paid the previous coupon in November after a similar delay.
“They’re effectively in default by our definition,” Johnson Ng, an analyst in Hong Kong at Standard & Poor’s, said by phone June 13. “The nature of their business requires a lot of capital for harvesting and trading. We think they’ll face difficulty in getting financing support, especially against the backdrop of accounting issues.”
