Shenzhen China Bicycle Co.'s controlling shareholder, Huarong Asset Management Corp., has applied for the company to face bankruptcy proceedings and, if approved, China Bicycle's shares will be delisted from the Shenzhen Stock Exchange. A company statement filed on the exchange's website said China Bicycle was seeking a resolution that would enable it to continue operations.
The company has been debt-heavy for many years - it has long-term debts of $66m, some of due to Schwinn's bankruptcy in 1992 - and now Chinese bicycle exporters face tougher punitive tariffs on the bikes exported to the EU and into Canada. When China Bicycles was restructured in 1999, Huarong Asset Management put the cash forward for the company to continue trading, taking a controlling interest.
On July 19th, China Bicycle said it be posting post a net loss of $62 000 for the first six months of this year. In 2004, the company made a loss of $2m on turnover of $17m.
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