China Shanshui Cement said during its stock exchange filing that it can't raise enough funds to repay its onshore debt due on November 12.

In an email sent to iPR News China Shanshui Cement said that Shandong Shanshui, which is one of its subsidiaries, has warned that it might not be able to pay its onshore debt due on November 12 this year. It was also stated that the company is still trying to raise the funds and are having great difficulty doing so due to internal disputes among shareholders who are battling control over the firm. Immediately after this news, Shanshui's US Dollar 2020 bonds got knocked down by 8.5 percent. 

According to Reuters, China's seventh largest cement maker said in a statement to the Hong Kong exchange that the default could cause a cross default provision on many financial facilities, including the bonds due on 2020. 

Besides Shanshui, coal trader Winsway Enterprises Holdings Ltd. and Hidili Industry International Development Ltd. also both failed to pay their outstanding balances. As more and more companies in China default on their loans in a time when the nation's economy is facing turbulence, various industries are getting hurt, including the cement. If Shanshui will not repay its debt, it would be the sixth company this year to default on onshore bonds.

Guotai Junan Securities Co. bond analyst Zhang Li said, "If Shanshui defaults, it will curb investors' demand for riskier bonds."

"But we can't exclude the possibility it will be able to get the money somewhere to pay," Li said.

Bloomberg Business has confirmed that Shanshui shareholders have recently voted to keep the company's Chairman Zhang Bin in the meeting it had amid fight for control of the cement company, which has been going on since April. According to the report, Tianrui International Holding Co, which is Shanshui's biggest shareholder with 28.16 in interest, has been trying to change the management of the company. However, 99.9% voted to retain Zhang as the head of the company. On November 25, however, another general meeting will take place to consider Tianrui's proposed resolutions. 

Shanshui has been in negotiation with financial institutions for financing, but it wasn't granted the funds due to its problematic management.