Financial authorities in the city of Tianjin plan to convert a portion of debt-stricken Bohai Steel Group's liabilities into bonds, according to rescue plans drawn up recently, the online financial magazine Caixin reported on Monday.
Officials met on Sept. 11 to discuss a comprehensive restructuring plan for the firm, which has liabilities of 192 billion yuan ($28.78 billion) from 105 creditors.
According to the plan, high-quality assets from Bohai Steel will be restructured to form a new company, which will take on 50 billion yuan of the total debt.
Another 60 billion yuan will be issued as bonds by the original holding company, with the local government set to inject an additional 10 billion yuan into the firm. The remaining 80 billion yuan will be retained by the original holding firm or written off.
The proposals are currently being assessed by financial institutions, the report said, citing unidentified sources. ($1 = 6.6707 Chinese yuan) (Reporting by David Stanway and Nathaniel Taplin; Editing by Kim Coghill)
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