Caijing Society News, September 23 (Reporter Li Jie): The liquidation petition hearing for Sino-Ocean Group, originally scheduled for today, has been postponed once again.

Sino-Ocean Group issued an announcement today that in the High Court hearing scheduled for September 23, 2024, the High Court ordered the hearing to be postponed to December 23, 2024.

The Bank of New York Mellon London Branch, the petitioner for the liquidation of Sino-Ocean Group, filed the petition with the court on June 27. Sino-Ocean subsequently announced on July 18 that significant progress had been made in the overall debt management arrangements for the Sino-Ocean Group and regarding the liquidation petition against the company, with the High Court setting the initial hearing date for September 11, 2024.

Subsequently, Sino-Ocean stated that the liquidation petition hearing was postponed to September 23; and the hearing extension announced today is its second extension, with a significantly longer extension time compared to the previous one, extending this time by 3 months.

Regarding the reason for the hearing extension, the Hong Kong High Court stated that the decision was made against the backdrop of Sino-Ocean Group actively promoting its overseas debt restructuring plan. Sino-Ocean Group has faced financial pressure in recent years, and the industry believes that this extension will provide more time for the implementation of the restructuring strategy.

It is reported that Sino-Ocean Group's restructuring plan includes concurrent restructuring plans in the United Kingdom and arrangements in Hong Kong, aimed at resolving the company's debt issues.

On September 22, the day before the court announced the postponement of the liquidation petition hearing, Sino-Ocean Group issued an announcement that significant progress had been made in its overseas debt restructuring, with the overseas debt restructuring plans in the United Kingdom and the Hong Kong agreement to be heard on October 18 and October 31 respectively.

The announcement shows that the overseas debt restructuring of Sino-Ocean GP will be implemented through two parallel procedures with mutual conditions, namely the restructuring plan implemented under Part 26A of the Companies Act (United Kingdom restructuring plan) and the agreement arrangements implemented by Sino-Ocean Properties (Hong Kong) according to Articles 670, 673, and 674 of the Company Regulations (Hong Kong agreement arrangements). This arrangement is made considering the governing laws of existing notes (i.e. the laws of the United Kingdom) and the governing laws of existing syndicated loans and existing bilateral loans (i.e. the laws of Hong Kong).

The United Kingdom restructuring plan will cover the relevant rights of each group of existing debt instruments, while the Hong Kong agreement arrangements will only cover existing syndicated loans and existing bilateral loans (i.e. Group A debts).

The United Kingdom restructuring plan hearing is scheduled to be held on October 18, 2024, in the High Court of England and Wales, seeking an order from the English court to convene a creditors' meeting within the scope to consider and, at its discretion, approve (whether or not amended) the United Kingdom restructuring plan.

The Hong Kong agreement arrangements hearing is scheduled to be held at 10:00 am (Hong Kong time) on October 31, 2024, in the High Court of Hong Kong, where an order will be sought from the Hong Kong court to convene a creditors' meeting for Group A debts to consider and, at its discretion, approve (whether or not amended) the Hong Kong agreement arrangements.

To avoid liquidation, Sino-Ocean GP plans to restructure following the method of the United Kingdom restructuring plan, where if 75% of one group of creditors agree, Sino-Ocean GP may obtain a judge's ruling to implement the restructuring plan if it can prove it is fair and optimal. Previously, there has been a successful case in Asia with Hong Kong Aviation.

According to the information disclosed by Sino-Ocean GP on September 10, more than 75% of the holders of Group A debts in the overseas debt restructuring have joined the restructuring support agreement.

According to the overseas debt restructuring plan published by Sino-Ocean, the plan covers a total principal amount of 5.636 billion US dollars, using new notes or new loans, mandatory convertible bonds, and new perpetual bonds as the consideration for the restructuring, while providing comprehensive and integrated credit enhancement.

It is understood that no real estate company has used the "United Kingdom restructuring plan" for restructuring so far. If Sino-Ocean's restructuring is successful this time, it will be the first real estate company to achieve debt restructuring in this manner.

Due to industry adjustments and various factors such as Sino-Ocean's pace of property launches, since the second quarter of 2023, Sino-Ocean's sales and collections have continued to weaken, financing has also stagnated, and debt pressure has gradually become apparent. Currently, Sino-Ocean Group has a total of 8 outstanding USD-denominated bonds, with an outstanding balance of 3.92 billion USD.

In terms of sales, from January 1, 2024 to August 31, Sino-Ocean Group's cumulative contracted sales amounted to approximately 22.18 billion yuan; the cumulative contracted sales floor area is about 1.85 million square meters; the average contracted sales price is 12,000 yuan per square meter.