OREANDA-NEWS. Fitch Ratings has downgraded China Shanshui Cement Group Limited's (Shanshui) Long-Term Issuer Default Rating (IDR) to 'RD' from 'C'. The downgrade follows the company's announcement that it filed a winding up petition and an application for the appointment of provisional liquidators with the Grand Court of the Cayman Islands on 10 November 2015. The filing constitutes an event of default under the USD500m offshore notes due 2020.

Shanshui's senior unsecured rating is affirmed at 'C', while the Recovery Rating is downgraded to 'RR6' from 'RR4' as the filing of the winding-up petition when the company's business remains viable raises uncertainties over how offshore creditors, who do not benefit from guarantees from onshore operating entities, will be treated during any recovery process.

The company also said that it is not able not repay around CNY2bn of onshore debt due 12 November 2015.

The Cayman Islands court will hear the winding up petition on 11 November 2015


Negative: Future developments that may, individually or collectively, lead to negative rating action include:
- Approval of the winding-up petition by Cayman Islands court will result in the IDR being downgraded to 'D'.

Positive: Future developments that may, individually or collectively, lead to positive rating action include:
- Rejection by the Cayman Islands court of the winding-up petition
- Shanshui repays the onshore debt due 12 November 2015
- Redemption of 2020 notes and other debt is not accelerated.