Creditors of Beijing-based Wintime Energy Co. Ltd. proposed that the coal conglomerate file for bankruptcy after it defaulted on about US$2 billion of bonds, Reuters reported, citing a relevant document.
Under a proposed restructuring plan, Wintime Energy will pay back a portion of its unsecured debts amounting to US$4.20 billion through asset disposals and debt-to-equity swaps, according to the report. The newswire added that the company will repay the remaining debt using cash flows generated by its subsidiaries for another 12 years.
The proposal is open for feedback until Jan. 17 based on the document, Reuters said.
Quoting an anonymous bond investor, the report said the proposal is still subject to negotiations as it may cause ownership losses among the company's major shareholders. Reuters cited another source as saying Wintime's bank creditors agreed to the proposed extension of the repayment period while nonbank creditors "largely agreed to convert the debt to equity."