November 9, 2018 / 9:15 AM / 5 days ago

Investors chew over Chinese firm's plan to pay bond interest in ham

SHANGHAI (Reuters) - A Chinese livestock company squeezed for cash has proposed to bondholders a plan to pay them some of the interest owed with ham and gift boxes of meat, according to an exchange filing, sending its stock soaring.

Chuying Agro-Pastoral Group Co Ltd (002477.SZ), which earlier in the week defaulted on a bond, said late on Thursday it was making the adjustment because cash flow was tight amid outbreaks of highly contagious African swine fever.

Since detecting a first case in early August, over 50 more have been reported in more than a dozen provinces and municipalities.

On Friday, shares in Shenzhen-listed Chuying Agro-Pastoral rose nearly 10 percent following its novel offer to repay.

The company said it was negotiating with creditors about the ham-for-interest plan, which would cover 271 million yuan ($39 million) owed in principal and interest.

It has proposed that the principal would be mostly repaid with money, but payments would be postponed.

Reporting by John Ruwitch; Editing by Simon Cameron-Moore

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