Maike Metals International, one of China’s biggest copper traders, is selling assets and studying a broader restructuring pattern as it battles to survive a liquidity crisis, the Financial Times reported on Monday, citing chair He Jinbi.
The company was discussing an investment with state-owned groups in the north-eastern city of Xian, the FT report quoted He as saying, but the government has told him to scale down the business first.
Maike, which handles a quarter of the country’s refined copper imports, is an important intermediary between Chinese metal consumers and global merchants such as Glencore and Trafigura.
Reuters could not immediately reach Maike for comment.
Market participants say Maike will struggle to maintain its dominant role in the Chinese copper market even if it can secure support from the banks and the government, according to the report. But He was philosophical about the company’s future.
“We’re actively selling assets and equities to replenish our liquidity and reduce debt,” He said to FT, adding that the final plan could involve “shareholding restructuring, asset restructuring and debt restructuring.
The company was “breaking arms to survive.”
Last month, Reuters reported that Maike was seeking help from the government and financial institutions to alleviate liquidity issues caused by measures aimed at curbing COVID-19 outbreaks. (Reporting by Akriti Sharma in Bengaluru; Editing by Sherry Jacob-Phillips)