One of the largest state-owned companies in western China has been forced to auction assets and shares originally valued at more than $2.5bn on an ecommerce website, a controversial move aimed at avoiding delisting from the Shenzhen stock exchange next year.
But the assets put up for sale by Qinghai Salt Lake Potash Company, China’s largest potash producer, have so far failed to attract bids on the Alibaba-owned ecommerce site, Taobao. That has forced the troubled group to cut the asking price by more than 75 per cent and launch five consecutive auction rounds, with the latest one set to kick off on Tuesday.
Chinese companies have come under heavy financial pressure this year as economic growth slows to a three-decade low. Many strains from excessive leverage have surfaced among local governments across the country, most recently with the default of state-commodities trader Tewoo Group.