A bottle maker in China for Coca-Cola Co. said it won’t make a full bond payment due today, making it the fourth company to default in the onshore debt market.

Zhuhai Zhongfu Enterprise Co., which also supplies bottles for PepsiCo Inc., will repay only 35 percent of the notes’ 590 million yuan ($95.1 million) in principal, Han Huiming, board secretary at the Chinese company, said in a phone interview on Thursday. The bottle maker will pay all the 31.152 million yuan of interest on the 5.28 percent securities sold in 2012, Han said.

“We are having a short-term liquidity problem,” said Han, based in the southern Chinese city of Zhuhai. “We are actively raising money for the remaining payment in the future.”

Chinese companies must pay back a record amount of bonds this year even as domestic economic growth slows. Cloud Live Technology Group Co., a private-sector company, reneged on obligations in April and Baoding Tianwei Group Co., a power- equipment maker, became the nation’s first state-owned enterprise to default on domestic debt.

Zhuhai Zhongfu, which employs about 4,000 people and isn’t state-owned, said in a May 21 statement that a bank consortium rejected its application for 500 million yuan of loans in May. The Zhuhai branches of China Everbright Bank Co. and Bank of China Ltd. have limited its freedom to spend the 61 million yuan of capital on its accounts, the company said.

The bottle maker’s liquidity problem was caused by the bank consortium’s lending cut, Han said. Even so, the company’s manufacturing is healthy and it has a sufficient number of orders from clients, he said.


Agreement breach

The bank group refrained from extending loans because the company’s biggest shareholder changed in January and that constituted a breach of a lending agreement in 2012, Han said.

Coca-Cola Asia Pacific said the impact of a likely default will be minimal because it gets less than 25 percent of its bottles from Chinese factories and has expanded in-house bottle production to 60 percent from 25 percent between 2010 and 2015, according to an e-mail from the company. PepsiCo didn’t immediately respond to a request for comment.

Zhuhai Zhongfu’s shares fell by their daily limit of 5 percent after trading resumed following an April 30 halt. The company’s notes yielded 19.33 percent in the secondary market on June 27 last year before being delisted from the exchange, exchange data show.


Falling orders

The company’s orders have declined since 2012 as its biggest clients increased their own production of bottles, according to a report from China International Capital Corp. on May 11. The company’s business with its three largest clients -- Coca-Cola, PepsiCo and Uni-President China Holdings Ltd. -- generated only 33 percent of revenue last year, down from 49 percent in 2011, according to CICC.

Zhuhai Zhongfu had a loss of 41.717 million yuan in the first quarter, compared with a 67.053 million yuan profit in the same period last year, according to a statement on May 15. The company had 2.58 billion yuan of borrowings as of March 31, while its assets were 3.66 billion yuan, it said.

Global beverage makers such as Coca-Cola and PepsiCo have more international experience and know-how to boost efficiencies, something that may be less common at local operators, said Bloomberg Intelligence consumer products analyst Thomas Jastrzab.

“In-house bottling operations can make it easier for beverage companies to roll out new products and change product sizes in response to changing market conditions,” he said.