August 24, 2018 / 2:36 PM / in 8 months

UPDATE 1-China's Haikou Meilan International Airport fails to make payment on commercial paper on time

(Recasts with company statement, adds context)

HONG KONG, Aug 24 (Reuters) - China’s Haikou Meilan International Airport Co Ltd said it was unable to pay the principal on its commercial paper due on Friday to the Shanghai Clearing House on time, as the fund transfer was done after the latter’s system closed.

The airport operator’s clarification came shortly after the Shanghai Clearing House said it had not received the interest payment.

“Our company apologises for the impact on the clearing house and creditors after we were unable to pay the principal on time,” Haikou Meilan International Airport said in a statement.

It said it made the transfer of the principal worth 1 billion yuan ($146 million) on Friday, but as the clearing house’s system had already closed the transaction will now be completed on Monday.

The company, which operates Haikou Meilan airport in China’s southern Hainan province, said it had also deposited interest worth 54 million yuan into the system.

There have been growing concerns that Chinese companies are unable to make full payments on bonds or commercial paper as the economy shows signs of slowing down and a trade war with the United States intensifies.

About 18 Chinese companies, mostly private, have defaulted on payments on 37 corporate bonds worth 41.2 billion yuan ($6 billion) so far in 2018, with CEFC Shanghai International Group the latest to default on a bond payment due on Monday. ($1 = 6.8740 Chinese yuan renminbi) (Reporting by Meg Shen in Hong Kong and Lee Chyen Yee in Singapore; Editing by Mark Potter and Susan Fenton)

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