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Sino-Ocean wins Hong Kong court approval to proceed with US$6 billion debt workout

Approval comes after a UK court allowed the state-backed Chinese developer to reorganise US$3.72 billion of bonds

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The Sino-Ocean Group headquarters in Beijing. Photo: Handout
Yulu Ao

Sino-Ocean Group has taken another big step to resolve its liquidity crisis after a Hong Kong court approved its US$6 billion debt workout plan, joining a handful of mainland Chinese developers that have managed to stave off hostile offshore creditors.

The High Court gave its nod to the state-backed company’s plan to settle its overdue debt involving several tranches of loans governed by Hong Kong law, according to a judgment on Wednesday. No creditors or lenders opposed the workout plan during the hearing.

The developer, which counts state-backed China Life Insurance and Dajia Insurance among its top shareholders, earlier this month won approval from a London court to proceed with its plan to settle with investors holding seven dollar-denominated bonds governed by UK law.

Sino-Ocean has proposed to reorganise its finances after reneging on its obligations in September 2023 as China’s housing market crisis deepened. The Beijing-based developer defaulted on syndicated loans totalling US$249.8 million and HK$12.2 billion, as well as US$3.72 billion of bonds, according to its stock exchange filings.

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The developer unveiled its restructuring plan in July, in which it offered to repay creditors with long-term bonds and a combination of new mandatory convertible notes and perpetual securities. Most of its lenders consented, while some bondholders opposed it.
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