China court accepts application to restructure parent of BMW's local partner

BEIJING (Reuters) - A Chinese court has accepted an application from a creditor of Huachen Automotive Group Holding Co Ltd seeking the restructuring of the parent of BMW AG's joint venture partner Brilliance China Automotive Holdings Ltd <1114.HK>.

The Liaoning Shenyang Municipal Intermediate People's Court accepted the application from GZ Tooling Group Co Ltd, an auto mould supplier, to restructure Huachen after the Liaoning government-owned company failed to pay mould costs and interest worth 10.2 million yuan ($1.55 million), showed a court filing published on Friday.

The restructuring will not involve Huachen's listed unit or joint ventures with BMW and Renault SA , state news agency Xinhua reported citing an unidentified Huachen executive.

The venture with BMW will remain a steady source of profit for the group, which will make its best effort to recover creditors' losses after restructuring, Xinhua said.

A Huachen media representative declined to comment beyond directing Reuters to the Xinhua article.

At June-end, Huachen had 46 billion yuan in assets and debt of 52.4 billion yuan, the court filing said, citing data from the Shanghai Stock Exchange.

Huachen defaulted on a 1 billion yuan bond last month, joining a growing number of delinquent state firms in a development that has hit investor confidence and roiled China's credit bond market.

The latest clutch of defaults, which Goldman Sachs analysts noted is bigger and includes more state-owned enterprises than last year, highlights the close attention needed to avoid being caught in the credit clean-up.

(Reporting by Zhang Yan, Yilei Sun and Ryan Woo in Beijing; Editing by Jacqueline Wong and Christopher Cushing)

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