BEIJING, Dec. 27 (Xinhua) -- State-owned Dalian Machine Tool Group Corp said it would take measures to avoid default on short-term bills after it was granted a 30-day grace period by bondholders.
If the company fails to remedy the problem by January 19, it would join a run of corporate defaults by companies in sectors such as machinery, coal and steel, where there is chronic overcapacity.
Dalian Machine Tool was put in technical default on the bills after a default on a separate debt agreement triggered a cross-default provision.
Under such a provision, a borrower would be in default on a bond agreement if it cannot honor another obligation.
Dalian Machine Tool issued the statement, dated December 22, on the website of the Shanghai Clearing House on Monday. (Global Times)
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