China Property Crisis: Sino-Ocean's 12-Day Liquidation Reprieve

Wednesday, 11 September 2024, 02:05

China property developer Sino-Ocean has secured a 12-day reprieve on liquidation, allowing time to rally creditor support for its debt restructuring. This comes after the Hong Kong High Court adjourned a winding-up hearing until September 23. With over 75% of loan creditors agreeing to the restructuring proposal, the company seeks to navigate its staggering US$5.6 billion debt amidst rising tensions among creditors.
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China Property Crisis: Sino-Ocean's 12-Day Liquidation Reprieve

China Property Developer Sino-Ocean's Restructuring Efforts and 12-Day Liquidation Reprieve

On Wednesday, the Hong Kong High Court granted Sino-Ocean a 12-day reprieve from liquidation, pushing the winding-up hearing to September 23. This extension gives the troubled Chinese property developer additional time to garner necessary support for its restructuring plan concerning US$5.6 billion in debt. The move comes as Sino-Ocean aims to negotiate with creditors after announcing that over 75% of its loan creditors have agreed to the proposed restructuring.

Restructuring Proposal Details

Sino-Ocean's restructuring proposal, introduced in July, categorizes creditors into four groups and offers options such as US$2.2 billion of new debt tied to offshore assets or exchanging debt for new equity instruments. However, divergence among different creditor factions has emerged, complicating the process.

  • One creditor group, holding over 25% of defaulted bonds, opposes the plan, suggesting alternatives that include reduced haircuts and increased equity issuances.
  • An additional group of investors may join in legal actions regarding the restructuring proposal.

Legal Context and Future Steps

The legal framework guiding Sino-Ocean’s US dollar-denominated debts falls under UK law. The company is expected to seek court approval to implement its restructuring later this month. This situation underscores the complexities facing many Chinese developers grappling with financial strains, revealing broader challenges within the China property market.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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