BEIJING: Chinese copper trader Maike Group has submitted a court application to start restructuring, it said on Friday (Feb 17), marking a further low for the company that was once China’s top copper buyer.
The application, revealed in a statement published on Maike’s official WeChat account, is one of the steps in a bankruptcy proceeding, said Vincent Qian, a lawyer at Beijing Dacheng law firm.
The application was filed with Xi’an Intermediate People’s Court, He Jinbi, Maike’s founder and chairman, told Reuters.
He declined to comment further.
Maike says it imported more than 1 million tonnes of refined copper per year, accounting for 29 per cent of China’s total imports in 2021.
It said last year it was facing a liquidity crunch after COVID-19 lockdowns hampered its ability to generate income and repay loans.
Its problems led to thousands of tonnes of copper being stranded in warehouses as it struggled to pay suppliers, and its absence from the market continues to support premiums in some regions.
“Operational financial difficulties struck Maike last September as a result of unprecedented uncertainty and market volatility amid the pandemic and geopolitical uncertainty,” it said in Friday’s statement.
The court application was to design a reasonable debt settlement plan, ensure fair compensation of creditors, restore the company’s operation and profitability, and safeguard the interests of employees and all parties, it added.
“If the company fails to restructure, it will enter liquidation,” said Qian.
The company had sought to sell assets to the local government to address its liquidity problems.
In January, state-owned metals trader Xiamen Xinde filed a lawsuit against Maike for its failure to fulfill contract delivery and repayment of money owed, according to a notice published by Xiamen Xinde.