Debt woes at one of China’s largest seafood processors are mounting after it defaulted on loans and interest payments worth CNY 837 million ($125m) in the past 70 days.

Dalian Tianbao Green Foods -- a major processor of pollock, cod, salmon and other seafood for export, which is already facing multiple lawsuits from creditors in China -- defaulted on three separate loans worth a total of CNY 837m between Feb. 14 and April 9, according to company documents filed at the Shenzhen Stock Exchange on Tuesday (April 16). 

This includes failure to repay two separate loans issued by China Exim Bank, a large state-owned policy lender, worth a total of CNY 297m. 

The latest defaults take the firm’s total overdue debts to $326m, based on an Undercurrent News analysis. This is up from the $136m claimed in 13 separate civil court cases brought against the firm by 10 Chinese companies and a major state-owned bank. 

The escalation of Dalian Tianbao’s debt problems will concern businesses already contending with the disruption of tariffs amid the ongoing trade war between the US and China. Dalian Tianbao is a “big company”, an industry source said back in February when Undercurrent broke the news of the lawsuits, and its legal problems could be “very disruptive” for its US, European and Japan-based clients. 

Other Chinese processors "could be in trouble", added the source, who wished to be kept anonymous.  

“They [Dalian Tianbao] have good quality but always at a price and rightly so. [These are] tough days now for plants with excess capacity,” wrote Praveen Dhawan, senior manager of global procurement at Triton Group, on Linkedin. 

Dalian Tianbao insists that its financial issues are not impacting daily operations, saying in a Tuesday filing: "The company's business activities continue as normal."

"Production facilities are in operation and product sales and inventory are in line with the company's actual production and sales plan," the company continued in its statement. "To alleviate the current tight cashflow situation required for continuous normal operation, the company has accelerated the collection of accounts receivable and asset disposal, in order to pay back debts and increase the liquidity of the company. At the same time, the company will urge those who have already been prepaid for raw material to deliver the said raw material as quickly as possible, so that the company can meet its production and operational needs." 

The latest defaults came to light after Dalian Tianbao was instructed by the Shenzhen stock exchange on April 10 to provide full disclosure of its overdue debts.

In response to the exchange's request, Dalian Tianbao said on Tuesday it missed full repayment of a CNY 138m loan inclusive of interest issued by China Exim Bank due on Feb. 13; a second also issued by China Exim due on March 8 worth CNY 159m; and the third due on April 9 issued by Beijing-based Great Wall Asset Management, worth CNY 549m. 

Its overdue debts now total CNY 1.87 billion, it said, less than Undercurrent's estimates which include some claims made through the courts as reported in December, but more than double those previously reported. 

The firm's assets were valued at CNY 4.97bn as of Dec. 31 2018, according to the firm. 

Amid its debt troubles, Dalian Tianbao's 2018 full-year revenues contracted by 29% to CNY 1.04bn, according to preliminary full-year results, while full-year net losses were CNY 164m [...]