A Chinese steel company has defaulted on an 852 million yuan ($131 million) bond payment, days after its chairman was found dead in an apparent suicide.

Dongbei Special Steel Group Co said late Monday it is unable to pay the interest or principal due on a 1-year bond, while the status of another 1.01 billion yuan on a shorter-term bill due next week is "uncertain."

As a result, a 38.58 percent stake in Shanghai-listed Fushun Special Steel Co owned by Dongbei Special Steel has been frozen, read a statement issued by Fushun Special Steel on Tuesday.

Dongbei Special Steel said last week that its chairman and Communist Party chief Yang Hua had been found hanged at his residence in a case now under investigation.

The steel sector, already burdened by overcapacity, has been especially hurt as demand slows amid economic slowdown.

State-owned Dongbei Special Steel, based in Dalian, Northeast China's Liaoning Province, makes different types of steel for the automotive industry.

China produces more steel than the rest of the world combined, and the government plans cuts of up to 150 million tons in production capacity in five years.

One of China's largest steelmakers, State-owned Wuhan Iron and Steel, plans to shed up to 50,000 jobs.

In April 2015, power equipment maker Baoding Tianwei Group Co failed to make a coupon payment of 85.5 million yuan, in what was said to be the first bond default by a State-owned company.

AFP - Global Times