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Lingnan convertible bond became the first convertible bond with state-owned background and triggered default.

On the evening of August 14, Lingnan Shares announced that the Lingnan Convertible Bonds it issued could not repay the principal and interest on time, which was a material default. Recently, Lingnan Shares has given the market a warning, saying that the existing monetary funds are not enough to cover the repayment amount of the "Lingnan Convertible Bonds".

It is worth noting that the Management Committee of Zhongshan Torch High-tech Industrial Development Zone is the actual controller of Lingnan Shares.

Affected by this, Lingnan shares hit the limit down of 0.84 yuan per share in the morning trading on the 15th.

Unexpected breach of contract

The default of Lingnan convertible bonds is not surprising, as the company has already warned of the risks many times before.

Lingnan shares publicly issued 660 million yuan of Lingnan convertible bonds in 2018, which will mature on August 14, 2024. According to the prospectus, the total redemption price of "Lingnan convertible bonds" upon maturity is 107 yuan per bond.

On the evening of the 14th, Lingnan Shares announced that as of August 13, the remaining amount of "Lingnan Convertible Bonds" was 489 million yuan, and the company's existing cash is unable to repay the "Lingnan Convertible Bonds", and the "Lingnan Convertible Bonds" cannot be redeemed on schedule.