Celestial Nutrifoods, the Beijing-based soybean food and beverage maker, says it recorded a net loss of RMB 6.4 million ($1.3 million) for the 3 months ended 31 March 2010 (1Q2010) compared to a post-tax profit of RMB 141.1 million in 1Q2009.

Revenue of the group decreased 18.2% to RMB 384.2 million from RMB 469.6 despite additional revenue of RMB 64.3 million contributed by new products such as bio-fuels, high protein nutrient beverages and high protein nutrient powders.

Celestial says the decrease in revenue is largely attributable to the negative publicity arising from the early redemption of the convertible bonds; increasingly competitive market conditions; and decline in domestic consumer spending in China.

On 23 May, Celestial received redemption notifications from the holders of zero coupon convertible bonds issued on 12 June 2006, representing $234.6 million out of the total principal amount of $235 million.

Celestial says the company is currently not in a position to meet its payment obligations in respect of the bonds redeemed and is reviewing strategic options to restructure the bonds, including negotiating with the holders of the bonds.