Chinese company that paid debt in ham now running out of pigs

Image of pigs in a cage.
Image of pigs in a cage. Photo credit: Getty

A Chinese pig company that announced it was going to pay investors in ham after running short of money now faces a new problem - it's running out of pigs.

Faced with a cash-crunch last year, Chuying Agro-Pastoral Group offered its debt-holders payments with pork packages instead of interest.

Now its money problems are so severe it's unable to buy enough feed, according to an announcement on the Shenzhen Stock Exchange.

As a result the hogs the company raises have been starving to death, resulting in a higher death rate than anticipated.

Chuying Agro-Pastoral Group has to repay 2.3 billion Yuan of bonds this year (nearly half a billion New Zealand dollars), according to Bloomberg.

The company says it will swing to a loss of 2.9-3.3 billion Yuan in 2018, compared with a profit of 45 million yuan a year earlier.

It's one of hundreds of listed Chinese companies facing big losses as a result of a slowing economy and Beijing's deleveraging.

China's economy grew at its slowest pace in nearly three decades last year, as ramped-up deleveraging efforts to curb shadow banking triggered a funding squeeze among smaller firms and choked the private sector.

Economic growth is expected to ease further this year.

"The economy was already cooling, and suddenly we had the trade war, which is why we're seeing so many earnings implosions," said Yang Hongxun, an analyst with investment consultancy Shandong Shenguang.

"But it's possible some companies are using the bad year for an accounting big bath, so future results will look better."

Reuters / Newshub.

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