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China Credit Trust cites progress in avoiding shadow-bank default
January 23, 2014 / 1:00 AM / 4 years ago

China Credit Trust cites progress in avoiding shadow-bank default

SHANGHAI, Jan 23 (Reuters) - China Credit Trust Co Ltd, whose product could set a landmark precedent for default in China’s fast-growing shadow bank sector, said it is in discussions with new investors in an effort to raise the funds necessary to pay off current investors when the high-yielding product matures on Jan. 31.

China Credit Trust also told investors in “Credit Equals Gold #1 Collective Trust Product” that the debt-ridden coal company whose loan from the trust company is about to mature has received a key government permit that will allow it to restart production on one of its coal mines, according to a statement from the trust company to investors obtained by Reuters.

Such a restart could enable the coal company, Shanxi Zhenfu Energy Group Ltd to generate the revenue necessary to repay investors.

Industrial Commercial Bank of China , which helped market the trust product to wealthy investors through several branches, has previously said it would not bear the “main responsibility” for repaying investors. ($1 = 6.0513 Chinese yuan) (Reporting by Gabriel Wildau; Editing by Kazunori Takada)

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