Taizinai owes foreign and domestic firms

08:07, December 06, 2010      

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Taizinai, a leading Chinese yogurt producer now undergoing bankruptcy reorganization, declared on Saturday it has enormous debts owed to domestic investors along with unconfirmed ones to foreign investors, including Citibank.

Beijing-based Deheng Law Office, which was designated by a local court to handle the bankruptcy proceedings of Taizinai's major branches in Hunan Province, held a meeting with representatives of 579 creditors in the capital, Changsha, late Saturday and announced the dairy group's provincial branches owe 1.213 billion yuan (US$182 million) to 1,315 domestic investors.

In addition, more than 30 creditors, including Citibank, the Royal Bank of Scotland and many overseas organizations and individuals, have claimed several billion yuan in debts from Taizinai, but the amount is still being studied, the law office said.

Citibank alone had claimed 540 million yuan while RBS demanded payment of nearly 200 million yuan from Taizinai, it said.

However, the Beijing law office didn't announce details about payment procedures, leaving many creditors displeased.

Taizinai, which has branches in Beijing as well as Hubei and Sichuan provinces and on Cayman Islands, owes a huge debt due to its rapid expansion which was backed by investment banks such as Actis Capital, Morgan Stanley and Goldman Sachs.

In April, a Cayman Islands court declared Taizinai's local branch bankrupt due to its debt to Citibank.

Creditors have filed bankruptcy lawsuits against the dairy maker in different places in China.

The government of Zhuzhou, where Taizinai is headquarted, has set up a firm as the sole leasing operator of Taizinai in an attempt to lead the diary maker out of bankruptcy.


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