Reports: Deruibao bankrupt
Reports suggest that struggling Shandong, China-based tyre manufacturing Deruibao tyre has now officially declared bankruptcy. As Tyres & Accessories reported in February, the company called on local Grungrao County officials for support who tried to restructure the business. Qingdao Doublestar and Hengfeng tyre were also linked to the firm as possible buyers.
However, in May the Wall Street Journal reported that moves towards official bankruptcy were put off because Deruibao also guaranteed loans taken out by other companies, and a bankruptcy filing had the potential to trigger a domino effect. Names linked to such guarantees include one of the firm’s potential suitors, Qingdao Doublestar as well as well-known Chinese tyre manufacturing equipment suppliers Mesnac and Greatoo. According to the WSJ report, “The regulators are on the lookout for any signs of systemic risks”. Those comments were made in May, but if the latest reports from ERJ are anything to go by, things have changed and the local quasi-governmental tyre industry association CRIA is now confirming that bankruptcy proceedings and liquidation processes are underway.
Other reports echoed T&A’s analysis from earlier this year that there are now undeniable signs that further consolidation is likely in China, with some even suggesting that the Chinese government is actually in favour of this because of the standard raising effect it could produce.
Tyres & Accessories has contacted Deruibao for comment, but so far none has been received.