Sino-Ocean Sees Increase in Loan Creditor Backing for Debt Plan

(Bloomberg) -- Sino-Ocean Group Holding Ltd. said it has garnered increased support from loan creditors, as the defaulted builder works to shore up backing for its restructuring plan ahead of a liquidation hearing next month.

The company said 72.5% of a group of creditors holding loan facilities has acceded to its debt overhaul proposal, according to a filing to the Hong Kong stock exchange on Thursday, an increase from around 50% support in July.

The company didn’t disclose its support levels among bondholders. Sino-Ocean’s proposed restructuring divides creditors into four classes, one for loan creditors and three for bondholders. 

Sino-Ocean is under pressure to come up with a workable restructuring plan ahead a court hearing on Sept. 11 when it will have to defend itself against a winding-up petition. At least six Chinese developers, including China Evergrande Group, have received liquidation orders from Hong Kong courts after failing to resolve disputes with creditors. 

In the filing, the builder also said it had extended the deadline for a fee that creditors would get for supporting the plan to Sept. 10, from Aug. 22.

In July, the company said it would restructure about $5.6 billion in aggregate principal into $2.2 billion of new debt. Remaining claims would be exchanged into mandatory convertible bonds or new perpetual securities. A key creditor group said that it was opposed to the plan at the time.

The group of creditors recently offered a counter proposal to the restructuring plan, Bloomberg reported earlier. 

Once considered one of the stronger names among China’s developers, Sino-Ocean has several hundred projects in China, but the country’s property slump continues to weigh on sales. 

For the first seven months of the year, contracted sales tumbled 47.3% compared with the year-earlier period. It had total cash resources of 5.02 billion yuan ($703 million) as of end of 2023, according to its latest annual report. 

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