December 29, 2009 / 9:51 AM / 9 years ago

China firm says won't pay Goldman for oil options losses

BEIJING, Dec 29 (Reuters) - A small Chinese power generator said on Tuesday that it would not compensate a Goldman Sachs unit after defaulting on two oil hedging contracts.

Shenzhen Nanshan Power (000037.SZ) (200037.SZ) said in a statement that it received several notices from J. Aron & Company, a trading subsidiary of Goldman Sachs (GS.N), for at least $79.96 million as compensation for terminating oil option contracts.

“We will not accept the demand by J. Aron for all the losses and related interests,” Nanshan said.

“We will try our best to negotiate with J. Aron and resolve the dispute peacefully...but the possibility of using a lawsuit can not be ruled out when talks fail,” it added.

A Beijing-based Goldman Sachs corporate communication official declined to comment. (Reporting by Eadie Chen and Chen Aizhu; Editing by Michael Urquhart) (eadie.chen@reuters.com; +8610 6627 1268; Reuters Messaging: eadie.chen.reuters.com@reuters.net))

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