Onshore-offshore distressed situations

Overview

Distressed situations won’t always restrict themselves neatly to geographical borders; just like all other aspects of business, assets, operations and relationships can be distributed across multiple jurisdictions, including China and Hong Kong.

We’re here to help address complex problems in onshore-offshore distressed situations and give you pragmatic advice and solutions.

You might be an offshore investor struggling to obtain recovery from an onshore (e.g. China) investment, or an onshore investor trying to obtain financial information from an offshore debtor company in financial distress, or a creditor who is inexperienced in dealing with cross border restructurings or insolvency.

Whatever your needs, we’ll use our extensive regional network, rich industry and market knowledge and our solid experience of achieving positive outcomes for clients, for you – so that you can start to take control again and reach reasonable compromises with your onshore or offshore counterparties. 

 

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Potential issues

Issues you may be facing:

  • Your onshore operation is underperforming or maybe it’s in financial crisis due to mismanagement.
  • Your foreign debtor is in financial distress and may not be able to meet its repayment obligations and you want an independent view on what to do next.
  • You want to take the right steps to realise, or obtain control over, onshore assets of an offshore debtor in financial distress.
  • You want to hire a financial advisor to give you advice on your negotiations with foreign counterparties, such as debtors and creditors.
  • You want to restructure a cross-border credit facility secured by onshore assets and which may involve onshore stakeholders.
  • You want to engage an independent financial advisor to review the financial performance of a foreign debtor.
  • You are losing control of your onshore business/operations.
  • You want to petition for the parallel liquidation of a debtor company in two separate jurisdictions

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How we can support you

When it comes to cross-border distressed situations, our experienced and dedicated team can:

  • Provide interim management of onshore operations to quickly stabilise the business.
  • Conduct tailored financial review on an onshore/offshore debtor and give you clear advice on what to do next, whether that’s restructuring, receivership or liquidation.
  • Coordinate all the restructuring efforts and stakeholder communication in multiple jurisdictions.
  • Help seize, and maintain control of, onshore assets when necessary.
  • Identify appropriate routes to exit an investment in a foreign jurisdiction, and take care of negotiations with counterparties, communication with local government and regulators.
  • Negotiate leverage for international creditors through litigation in PRC Courts.
  • Use secondary markets to optimise existing investors’ exit.
  • Act as liquidators or receivers in parallel enforcement actions in different jurisdictions to get the best recovery for investors.

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Our experience

Suntech Power Holdings Co. Ltd (one of the world’s largest producers of solar panels)

  • Initial financial review for offshore institutional bondholders. Coordinating restructuring for stakeholders in the PRC, US and Europe under a Cayman Island provisional liquidation framework. 
  • Progressing a US Chapter 15 application for a holistic restructuring.
  • Safeguarding creditors’ interest. 
  • Preserving PRC assets.

Total debt size: USD500 million

Rightway China Real Estate Ltd (a PRC property developer incorporated in the Cayman Islands)

  • Initial financial review for offshore institutional bondholders (the Bondholders).
  • Appointed by the Bondholders to act as receivers. 
  • Obtaining and maintaining control of onshore assets. 
  • Initiating PRC litigation to maximise Bondholders’ bargaining power. 
  • Existing Bondholders’ exit optimised through secondary market.

Total debt size: USD700 million

Wongs Investment Holdings Development Group Limited (a holding company incorporated in the BVI)

  • Acting as the liquidators of the company in Hong Kong and in the BVI. 
  • Securing and realising the assets, including majority equity interest in a subsidiary listed on the Hong Kong Stock Exchange.
  • Working closely with stakeholders to manage the realisation process.

Asset size: over HKD200 million

The biggest thermal coal mining company in Indonesia

  • Acting as financial advisor of an onshore bank creditor. 
  • Reviewing the financials and providing comments on the financial implications of the proposed debt restructuring.

Total debt size: USD3,845 million

Lehman Brothers International (Europe) (LBIE)

  • Providing assistance to LBIE’s UK administrators to monetise the stocks and securities in its QFII in China and thereafter to repatriate cash from China.
  • Dealing with all necessary regulatory clearances.
  • Assisting with the first significant QFII exit and cash repatriation.

Portfolio size: USD1 billion

FerroChina Limited (a Singapore listed steelmaker with operations in Jiangsu, China)

  • Acting as receivers appointed by foreign creditors.
  • Working with the PRC bankruptcy reorganisation administrator to deal with cross-border restructuring and to protect foreign creditors’ interests.

Total debt size: Over USD290 million in offshore debts and over USD700 million in onshore debts

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Contact us

Ted Osborn
Restructuring and insolvency Leader
Tel: +[852] 2289 2299
Email

Victor Jong
Partner
Tel: +[86] (21) 2323 3650
Email

Christopher So
Partner
Tel: +[852] 2289 2577
Email

Marie Rowbotham
Director
Tel: +[852] 2289 2504
Email

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