Dandong Port, a major gateway port in northeast China, has announced that the company failed to make payments on its medium term notes which expired on October 30.
Dandong Port issued the RMB1bn ($150m) three-year notes in 2014 and the company has only paid RMB58.6m ($8.85m) of interest to the trustee so far.
The company said the default is mainly due to heavy debts and high short-term payment pressure.
China Lianhe Credit Rating has lowered the company’s rating from AA to C due to the default, made worse as the company didn’t issue any warning regarding the payment default prior to the expiration of the notes.
Dandong Port also has another six upcoming note payments totalling RMB6.95bn.
Dandong Port, controlled by local multisector enterprise Rilin Group and businessman Wang Wenliang, founder of Rilin Group, is one of the few private-owned seaports in China. The port, which is situated on the border with North Korea, reported a net profit of RMB539m for the first three quarters of 2017.
In September last year, Wang Wenliang was involved in a bribery scandal in an election of representatives for the National People’s Congress, and later resigned from the group in August 2017.