Bloomberg reported that Chinese steelmaker FerroChina Ltd is unable to repay loans totaling CNY 706 million because of the current economic crisis and a further CNY 4.52 billion in loans and notes may also be at risk.

FerroChina Ltd in a statement to the Singapore Stock Exchange, said that production at FerroChina's plants has been suspended and the mill is in talks with creditors and potential investors.

The statement said “Due to the current economic crisis, the group is unable to repay part of its working capital loans aggregating approximately CNY 706 million which has become due and payable. The management is seeking new equity and loan funding. It said that further loan facilities and notes of about CNY 2.03 billion and some other working capital loans totaling CNY 2.49 billion may potentially become due.

Mr Zhang Qin JPMorgan Chase & Co analyst said that “The Company has been having financing problems for a while. It has been looking for foreign strategic investors for a restructuring.''

The company, which has a market value of USD 436 million requested on October 7th that its Singapore listed shares be suspended from trade. The stock, which last traded at 54.5 Singapore cents has slumped 70% this year.