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Fengxiang Says Lawsuit Against Parent May Trigger Early Repayment of Bank Loans; Shares Fall 5%

MT Newswires ·  07/20 15:02

03:02 AM EDT, 07/20/2022 (MT Newswires) -- Shandong Fengxiang (HKG:9977) said a potential restructuring of parent firm GMK Holdings may trigger early repayment of its bank borrowings and could result in a change of its controlling shareholder.

GMK, which provided guarantees for some of the loans obtained by broiler producer Shandong Fengxiang, was implicated in a lawsuit against a subsidiary.

Earlier this year, a creditor filed a case to seek a judicial restructuring of GMK subsidiary Xiangguang Copper on the grounds of its alleged inability to pay debts.

The restructuring would involve GMK and two affiliates, which hold a combined 992.85 million shares, equivalent to a 70.92% stake, in Shandong Fengxiang.

The company said it is currently not subject to restructuring and does not expect the incident to affect its normal operations, according to a late Tuesday disclosure.

The stock fell 5% in Wednesday's afternoon trade.

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