Wuzhou International Holdings Ltd. appointed RSM Corporate Advisory (Hong Kong) Ltd. as its independent restructuring adviser to assist the company in assessing its financial position and evaluating its options.
The company had requested a halt in trading of its shares, effective 9:30 a.m. Hong Kong time Aug. 10, pending the release of the announcement. The halt was lifted at 1 p.m. Trading in its notes remain halted until further notice.
Certain creditors have demanded that the company repay loans totaling roughly 1.00 billion yuan early as the company disclosed in early July that an event of default occurred relating to its issuance of US$300.0 million in 13.75% senior notes due 2018 under an agreement signed Sept. 26, 2013. The creditors also declared some loans to be due and payable immediately because of the default.
Five civil petitions have been filed in China against the company or its subsidiaries for the repayment of loans with a combined estimated value of 484.4 million yuan, according to a previous report.
The company said it has received court documents for six additional legal actions commenced by creditors in China. Further, it received notices from Pingan Real Estate Capital Ltd. and PA Glorious Opportunity VIII Ltd., holders of the company's convertible notes issued Sept. 26, 2014, and Oct. 22, 2014, respectively, in the aggregate principal amount of US$100 million with an annual interest rate of 7% and a maturity date of Sept. 30, 2019.
Pingan and PA Glorious are demanding immediate repayment of the full outstanding principal amount under the convertible notes, which totals roughly US$55.7 million.
Wuzhou said its independent restructuring adviser will work toward a mutually acceptable restructuring solution for its creditors and the company will work with the adviser to seek the view of the creditors on the restructuring plans.
As of Aug. 9, US$1 was equivalent to 6.82 Chinese yuan.