September 10, 2018 / 10:38 AM / in 2 months

China's DMG Entertainment defaults on bond payments

SHANGHAI, Sept 10 (Reuters) - Chinese entertainment, TV content and advertising firm DMG Entertainment and Media Co Ltd said on Monday it had failed to make interest and principal payments on a maturing one-year commercial paper issue.

The payments on the 5.9 percent, one-year commercial paper issue total 423.6 million yuan ($61.76 million).

In a statement posted on the website of the Shenzhen Stock Exchange, the company said it was unable to make the payments due to “business developing below expectations, a relatively large drop in operating results, relatively large uncertainty in sustained profitability, and difficulty in raising funds.”

The default follows a warning from the company last week that it was uncertain of its ability to make the bond payments.

DMG Entertainment posted a 91.9 percent drop in its first-half profit compared with the same period a year earlier. ($1 = 6.8592 Chinese yuan)

Reporting by Andrew Galbraith; Editing by Simon Cameron-Moore

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