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Shanghai Electric's $1.4bn in uncollected bills spook market

Power equipment maker goes to court against tardy state enterprises

HONG KONG -- A top Chinese producer of energy equipment, with a corporate history tracing to the Qing dynasty in 1902, has sparked investor and analyst worries after the manufacturer warned that other state-controlled businesses had fallen behind on almost $1.4 billion in payments.

Shanghai Electric Group's shares have dropped by 16% in Hong Kong and 15% in Shanghai since the potential losses were disclosed before trading on May 31. Moody's Investors Service and S&P Global Ratings have cut their outlook on the company's credit rating to "negative" as they review the situation.

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