BRIEF: UK court approves Sino-Ocean’s $5.6 billion debt restructuring

A UK court approved an offshore debt restructuring plan proposed by property developer Sino-Ocean Group Holding Ltd. (3377.HK) on Monday, despite opposition from several of its creditors. The news ignited a rally for Sino-Ocean’s stock, which surged 18.18% on Tuesday to close at HK$0.26.

Sino-Ocean Group fell into a debt crisis in July 2023 and proposed an offshore debt restructuring plan last July. According to financial media Caixin, the plan divides the debt holders into four groups, involving a total principal amount exceeding $5.6 billion. Creditors from Groups A and C gave 100% and 81.5% approval for the plan, respectively, passing the required threshold of 75%. But Groups B and D failed to reach that threshold, securing approval from just 47.7% and 34.9% of creditors, respectively. Notably, the Group A bonds are still subject to a Hong Kong court hearing.

The British court stated that if the restructuring plan was not approved, the most likely alternative outcome would be a bankruptcy liquidation, which would result in worse overall consequences for creditors. Under UK law, even if the minimum 75% approval threshold is not met, a judge still has the authority to sanction the entire restructuring plan under certain conditions.

By Lee Shih Ta

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