Bondholders ‘strongly oppose’ Chinese developer Sino-Ocean’s debt-revamp plan
- The bondholders’ legal adviser held a meeting to boycott the developer’s proposal, urging creditors not to sign the restructuring support agreement
Embattled Chinese developer Sino-Ocean Group faces the risk of liquidation amid challenges to secure enough consent votes on a restructuring proposal, as a key bondholder group is “strongly opposed” to it.
Linklaters, the legal adviser for an ad hoc group of bondholders, organised a meeting on Wednesday to advocate a veto of the developer’s proposal, asking creditors not to sign the restructuring support agreement (RSA), the Post has learned. The ad hoc group constitutes more than 25 per cent of the notes guaranteed by Sino-Ocean, Linklaters told the meeting.
The law firm told creditors that the commercial terms were “not appropriate”, referring to a lack of financial support from China Life Insurance, the biggest shareholder of Sino-Ocean and “unfair” asset allocation to offshore creditors, according to a memo of the meeting seen by the Post.
Linklaters also warned that a liquidation analysis of the company to estimate creditors’ recovery is not complete and some details crucial to ensure the implementation of the company’s plan are missing.
It added that the current proposal was very “prejudicial” to bondholders, and the ad hoc group “strongly opposes” the plan. More than 60 per cent of bondholders oppose the RSA, the memo showed.
Linklater did not reply to an emailed request for comment.
