Reorg Asia Bi-Weekly
Evergrande, The Winter Olympics And China’s Assertiveness (Jan. 24 - Feb. 7)
Mon 02/07/2022 01:09 AM
From Reorg Asia’s Managing Editors
In this column, managing editors Stephen Aldred and Shasha Dai take turns writing about trends in high yield, distressed debt, restructuring and bankruptcy in major Asian markets including China, Southeast Asia, India and Australia. For questions or comments, contact Stephen at saldred@reorg.com and Shasha at sdai@reorg.com. Send your people and fund news to asiaeditorial@reorg.com.
Over the weekend, I read with delight the latest from one of my favorite writers, The Wall Street Journal sports columnist Jason Gay, a dispatch from the Beijing winter Olympic games. Brimming with Jason’s trademark wit and humor, his personal account of arriving at and staying in the bubble—greeted at the airport by men and women dressed in hazmat suits who gave “brain-tickling nasal swabs”—reminded me of my own experience when Beijing played host to an earlier Olympics, the 2008 summer games. Travelling with an infant, we visited family members and toured newly built venues like the Bird’s Nest and the Water Cube. My parents adorned their house with likenesses of the games’ five mascots, Beibei, Jingjing, Huanhuan, Yingying and Nini, the first words of whose names combined produce Bei Jing Huan Ying Ni, or Welcome to Beijing.
That in about 14 years, the host country has gone from opening its arms to international recognition and appreciation to being more assertive and inward-looking is probably commensurate with China’s ascension to the world’s second-largest economy. Christopher Johnson, president of risk advisory China Strategies Group in Washington, was quoted by WSJ as saying that China’s message is, “We’re here, get used to it.”
Nonetheless, China’s (slight) insecurities around the winter games, which have been diplomatically boycotted by the U.S. and other countries, created an opening that was aptly capitalized on by Russian president Vladmir Putin, who met for a summit in Beijing with his Chinese counterpart Xi Jinping just hours before the winter games began. The Kremlin lost no time in releasing a joint statement—which Chinese state media did not immediately release though made reference to it—that mentioned a redistribution of power and certain states that interfere in the affairs of other sovereign nations.
Images of Putin and Xi standing shoulder to shoulder are akin to giving the U.S. the middle finger (or two). Just hours earlier, the U.S. reported that Russia might be circulating allegedly fabricated videos of Ukraine attacks on Russian interests as a pretext for invading Ukraine. Both China and Russia have long imperial histories, feel that they have been wronged by capitalist powers and harbor geopolitical aspirations. Both have territories that they deem integral to their states—for Russia, it’s Ukraine; for China, Taiwan. Keeping Putin and Xi joined at the hip is their shared desire to stand up against Western military prowess and the conviction that they should divide spheres of influence in Eurasia and keep out U.S. sway.
That’s their beliefs now and here. Times change. Former British Prime Minister Henry Palmerstone once said, “We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.” After all, it was Stalin and Hitler who signed the German-Soviet Nonaggression Pact back in August 1939, on the eve of WWII, an agreement that was only to be shattered when German troops invaded the Soviet Union in June 1941. The Soviet Union then found itself forming alliances with the U.S. and Britain, only to push hundreds of miles past the German front lines, drop an iron curtain over Eastern and Central European countries shortly after the Nazis were defeated and witness the dawn of the Cold War with the West. Like the Warring States era in ancient China, the patterns of alliance and opposition are ever-shifting.
One may ask: What does all this have to do with distressed debt?
With the Chinese state being such an explicit player—in addition to its roles as the regulator and referee—in the restructuring of distressed companies, the government can no longer be brushed aside as an insignificant bystander and instead needs to be inspected and studied much as a marshal investigates its opponent ahead of major military actions. China Evergrande Group, after months of being incommunicado, held a conference call with investors on Jan. 26. Some may say the call was held in response to ratcheted up pressure from the ad hoc committee of bondholders who criticized the lack of meaningful actions from Evergrande to address its offshore liabilities. The ad hoc committee threatened legal actions, in response to which Evergrande pleaded more time and patience.
A source with knowledge of the situation said that since the parties signed an NDA in October, the ad hoc committee has not received much information from the company. Requests for comment sent to the publicly disclosed email addresses of financial advisors to Evergrande and the company’s risk management committee generated no response by press time.
The seven-member risk management committee, in particular, represents the state’s interests and has its own set of financial and legal advisors that are separate from the company’s. The mere presence of the state interest—even without Evergrande citing “its size, complexity of its businesses and the myriad of interested parties”—points to a drawn-out process. And this state player is a savvy one, which has dealt with international negotiations for a while. State news agency Xinhua issued a separate statement that referenced the joint statement with Russia but didn’t mention NATO, which served to appease Putin and at the same time preserved Xi’s bargaining power with the U.S.
If China could say to international sports spectators, “We’re here, get used to it,” then they could say to Evergrande bondholders, “Six months, that’s our timetable, deal with it.”
--Shasha Dai, Managing Editor
From Our Financial & Legal Analysts
Below are links to reports written this week by our financial and legal analysts.
AUSTRALIA
Greensill Capital / Katerra Inc.
Judge David Jones entered an order Jan. 25 approving a resolution of Katerra’s objection to Greensill Ltd.’s $440 million claim. The agreed order provides for the withdrawal of Greensill’s claim “with prejudice.” The order states further that Greensill “shall not continue to prosecute any of the Greensill Claims to final judgement on the merits against the Debtors or Wind-Down Debtors in this Court or any other jurisdiction, foreign or domestic.”
Read Reorg’s coverage of Greensill HERE and Katerra HERE.
Golden Energy / Stanmore SMC Holdings
PT Dian Swastatika Sentosa Tbk (DSST), the parent company of Singapore-listed Golden Energy and Resources Ltd., announced on Feb. 3 that the company will hold a general meeting of shareholders (GMS) on Feb. 7 at 9 a.m. Jakarta time, to seek shareholder approval for the proposed acquisition of Dampier (Queensland) Coal Pty Ltd.’s shares in BHP Mitsui Coal Pte. Ltd. by Stanmore SMC Holdings Pty. Ltd. (SMC) for upto $1.35 billion.
Read Reorg’s coverage of Golden Energy HERE.
Jindal Steel and Power / Wollongong Coal
Wollongong Coal Ltd. announced Jan. 24 that the Takeovers Panel had on the same day said that it has declined to conduct proceedings in regard to an application received from Gordon Elkington, in regard to an independent experts report (IER) provided by BDO in the context of a compulsory acquisition under the Corporations Act 2001 (Cth) which allegedly did not comply with section 667C(2) of the Act.
Read Reorg’s coverage of Jindal Steel HERE.
Nickel Mines Ltd.
Nickel Mines Ltd. on Jan. 28 released its activities report for the quarter ended Dec. 31, 2021, with Hengjaya Nickel and Ranger Nickel RKEF projects in Indonesia showing combined sales on a 100% basis of $187.1 million for 10,086.7 tonnes of nickel metal, down 0.3% from the September quarter, underlying EBITDA of $60.8 million and underlying net profit of $57 million.
Read Reorg’s coverage of Nickel Mines HERE.
David Jones
David Jones’ turnover and concession sales declined by 9.2% and by 9.0% in comparable stores for the half, but grew by 3.2% in the last six weeks of the 26 weeks ended Dec. 26, 2021. In line with a space reduction strategy, trading space reduced by a further 5.8% relative to the prior period. Online sales increased by 44.2% and contributed 28.1% to total sales during the period.
Read Reorg’s coverage of David Jones HERE.
Myer Holdings Ltd.
Myer Holdings Ltd. in a trading update for the five months to Jan. 1, 2022, said 27% of department store bricks and mortar trading days were lost during the period due to Covid-19 enforced closures, compared to 10% in the prior corresponding period, though total sales were up 12.3% over the prior corresponding period. Myer at end November signed a four-year agreement to refinance its existing credit facilities due for renewal in November 2022 with a four year asset based loan funding package consisting of a secured revolving credit and term loan facility with JPMorgan and Gordon Brothers.
Read Reorg’s coverage of Myer Holdings HERE.
CHINA
Aoyuan Group
An ad hoc group of noteholders of this developer are organizing and have engaged Moelis and Weil Gotshal as financial and legal advisors, respectively.
Read Reorg’s coverage on Aoyuan HERE.
China Evergrande Group
During a conference call with investors, Evergrande said it planned to release a preliminary debt restructuring proposal in six months. A source with direct knowledge of the matter, however, said that the ad hoc committee of bondholders has received little information from the company since signing an NDA in October.
Read Reorg’s coverage on Evergrande HERE.
Country Garden
During a conference call with investors, company management detailed plans for repaying due Jan. 27 and July 25 offshore notes. This real estate company, though less risky than others, nonetheless piqued investors’ interest in part due to its size. Country Garden also recently tapped the onshore bond market in what was seen as a bellwether deal.
Read Reorg’s coverage on Country Garden HERE.
Shimao Group
In a list of 36 projects for sale that was seen by Reorg, the projects are listed to have a total valuation of over RMB 77 billion and outstanding collateralized financings of RMB 53 billion. The company has engaged Deloitte to help negotiate with offshore bank lenders about financing for 2022. Its offshore notes dropped 6 to 8 points across the curve following the news.
Read Reorg’s coverage on Shimao Group HERE.
Ronshine China
This real estate developer has prepared sufficient funds for redeeming $198 million notes due Feb. 1 and flagged that it faces $456 million notes due March 1. If Ronshine fails to redeem the March notes, it may resort to a liability management exercise.
Read Reorg’s coverage on Ronshine HERE.
Jinke Property Group
This developer’s onshore bonds dropped following protests by creditors at the company’s headquarters in Chongqing, demanding payments a few days before the Chinese New Year. The protests were particularly violent for its kind according to video clips posted on social media. We reported that migrant workers have organized similar protests at China Overseas Property.
Read Reorg’s coverage on Jinke HERE.
Yunnan Energy
It is part of LGFV Yunnan Provincial Investment Group, or YPIG. During a roadshow management held with prospective investors, Yunnan Energy said that it planned to issue onshore notes to redeem a total of RMB 30.5 billion bonds maturing within one year and was trying to secure commitment to RMB 18 billion nonstandard financing.
Read Reorg’s coverage on YPIG HERE.
Times China
This real estate developer has been in the news lately as it faces near-term debt maturities. During a conference call that company management held with investors on Jan. 18, management said that the company was making preparations to allocate funds onshore for the redemption of two notes due in April. It also plans to repay syndicated loans maturing in May and October with its own cash resources.
Read Reorg’s coverage on Times China HERE.
Logan Group
During a project diligence trip Logan held with investors, management said it was still investigating links to the company of reported private notes. However, subsequently during private meetings with investors, Logan admitted that it has provided guarantees for $200M notes due March and $230M notes due May.
Read Reorg’s coverage on Logan Group HERE.
Yango Group
On the heels of completing an exchange offer, Yango was told by its home province of Fujian to work with state-owned asset management companies to bring in those AMCs as investors. The talks are at a preliminary stage, and the company confirmed it was in talks with strategic investors but declined to comment on the AMC involvement.
Read Reorg’s coverage on Yango HERE.
Sunac China
This fourth-largest real estate developer in China has faced liquidity pressure in recent months. An onshore subsidiary of Sunac has wired sufficient funds to repay an RMB 3.5B bond putable Jan. 22. The company’s offshore notes subsequently rose eight to 12 points across the curve. Then, on Jan. 20, we reported that Sunac had wired sufficient funds to redeem RMB 920 million ABS due Feb. 9.
Read Reorg’s coverage on Sunac China HERE.
INDIA/SOUTH ASIA
Future Retail Ltd.
The Supreme Court of India on Feb. 3 reserved its order on a plea filed by Future Retail Ltd. seeking permission to go ahead with proceedings in the National Company Law Tribunal, where the company has sought approval for its proposed INR 247.13 billion ($3.273 billion) merger of Future Group with certain units of Reliance Industries.
The Supreme Court of India on Feb. 1 set aside the Oct. 29 and Feb. 2 Delhi High Court orders, and directed the high court judges to consider the matter on its own merits. The Oct. 29 Delhi High Court single bench order refused to provide relief to Future Retail’s appeal seeking a stay on the enforcement of an Oct. 25, 2020, SIAC emergency arbitrator award, which was in Amazon.com NV Investments Holdings LLC’s favour.
Read Reorg’s coverage on Future Retail HERE.
Birla Tyres Ltd.
The Competition Commission of India (CCI) has passed an order under section 3 of the Competition Act, 2002, against Birla Tyres Ltd. imposing a penalty of INR 1.783 billion ($23.8 million). The tyre manufacturer company said it is yet to receive the CCI order and believes that the company has sufficient grounds for an appeal.
Read Reorg’s coverage on Birla Tyres HERE.
Vedanta Resources Ltd./ Vedanta Ltd.
Vedanta Ltd. clarified that recent media reports suggesting that the company has had preliminary discussions with prospective advisors about combining the company with Vedanta Resources Ltd. were “speculative and misleading” to investors. The company further detailed that no such proposal was “under consideration” and denied the media reports.
Read Reorg’s coverage on Vedanta Ltd. HERE and Vedanta Resources Ltd. HERE.
Dewan Housing Finance Corporation Ltd.
Dewan Housing Finance Corporation Ltd., (also known as Piramal Capital & Housing Finance Ltd.), said that the National Company Law Appellate Tribunal has ordered the committee of creditors to reconsider the extent of challenging the distribution of proceeds (if any) from fraudulent transactions to the benefit of the resolution applicant.
Read Reorg’s coverage on Dewan Housing Finance HERE.
The National Asset Reconstruction Company Ltd. (NARCL) and India Debt Resolution Company Ltd. (IDRCL) have received requisite approvals, including that from the Reserve Bank of India, to commence operations. Multiple state-owned as well as private banks have so far identified 38 non-performing assets (NPA) worth INR 830 billion ($11.07 billion), and the transfer will happen in a phased manner. In the first phase, the banks will transfer 15 NPA accounts aggregating to INR 500 billion in the current financial year ending March 31.
Read Reorg’s coverage of Bankruptcy Industry Updates HERE.
Indiabulls Housing Finance
An Edelweiss Group fund on Dec. 31 concluded the purchase of INR 2.10 billion ($28. 2 million) out of a total of INR 3.88 billion pass-through certificates (PTCs) backed by retail loans including housing loan receivables issued by Retail Securitisation Opportunities Trust. The INR 2.10 billion loans which are to be held by Edelweiss will be senior in the structure and pay an internal rate of return of 19.5%.
Read Reorg’s coverage on Indiabulls Housing Finance HERE.
SOUTHEAST ASIA
Noble Group Holdings Ltd.
Noble Group Holdings Ltd. announced Jan. 25 that its deleveraging and reorganisation continues to be implemented in accordance with terms in its original statement of Dec. 17, 2021, and that the board is working in full cooperation with the ad hoc group (AHG) representing more than 80% in principal value of the outstanding 2023 notes in accordance with terms of the lock-up agreement.
Read Reorg’s coverage on Noble Group HERE.
Sri Rejeki Isman Tbk (Sritex)
Lender banks Citibank N.A. Jakarta and Taipei Fubon Commercial Bank, whose votes were not included in the tally which approved Sritex’s contested revised composition plan - a vote which ultimately ended its in-court supervised restructuring, or PKPU - are considering filing a cassation case to the Indonesian Supreme Court which, if successful, would enter the company into bankruptcy.
Read Reorg’s coverage of Sritex HERE.
Serba Dinamik Holdings Bhd.
The company at its Jan. 31 annual general meeting (AGM) told shareholders that it is still in the midst of “engaging with financiers'' to put together a proposal for its restructuring including an amended payment plan. At the AGM, the management also disclosed that the significant majority of SDHB’s MYR 346.5 million ($82.9 million) trade receivable impairments and MYR 552.6 million inventory write-downs incurred in the fiscal year ended June 2021 are attributable to the company’s operations in Malaysia and the United Arab Emirates.
Read Reorg’s coverage of Serba Dinamik HERE.
Garuda Indonesia (Persero) Tbk
At a virtual hearing at Indonesia’s House of Representatives held Jan. 25, state-owned enterprises minister Erick Thohir said that seven large lessors of the Indonesian flag carrier have formed an ad hoc committee, with four of the seven so far agreeing with the carrier’s restructuring proposal. Meanwhile, under its new PKPU timeline, the decision on whether to proceed with voting on Garuda’s composition plan or to extend its PKPU will be held on March 15.
Read Reorg’s coverage of Garuda Indonesia HERE.
Pan Brothers Tbk
Shareholders of Pan Brothers have approved a motion to issue an up to $350 million bond for a maximum of five years and at a maximum fixed interest rate of 12%, at the company’s extraordinary general meeting held in Jakarta Jan. 26. In addition, shareholders also approved the company and/or its subsidiaries providing guarantees in the form of corporate guarantees and/or security over assets representing more than 50% of total net assets in relation to future financing plans.
Read Reorg’s coverage of Pan Brothers HERE.
Gajah Tunggal Tbk
Deutsche Bank, Emirates NBD and HSBC have provided a $200 million amortizing loan to Giti Tire with proceeds to refinance existing debt, including short-term borrowings of the borrower group, and for working capital purposes, said two sources familiar with the matter.
Read Reorg’s coverage of Gajah Tunggal HERE.
PT Agung Podomoro Land Tbk
The Indonesian property developer announced Feb. 3 that it recorded IDR 2.7 trillion ($187.8 million) in marketing sales for 2021 - exceeding its earlier target of IDR 2 trillion for the full year - driven by the “acceleration of the development of new property projects” which were able to meet the current needs of consumers.
Read Reorg’s coverage of Agung Podomoro Land HERE.
PT Kawasan Industri Jababeka Tbk (Jababeka)
A notice from Jababeka published Feb. 2 in local daily newspaper Investor Daily shows a third AGM for the company scheduled for Feb. 23 at 10 a.m. JKT, for shareholders to vote on resolutions relating to the provision of corporate guarantees by the company’s subsidiaries for its $350 million contemplated notes and an amendment and restatement of the company’s articles of association.
Read Reorg’s coverage of Jababeka HERE.
Week Ahead
Below is a list of events on the Reorg Asia Calendar for the next two weeks
In this column, managing editors Stephen Aldred and Shasha Dai take turns writing about trends in high yield, distressed debt, restructuring and bankruptcy in major Asian markets including China, Southeast Asia, India and Australia. For questions or comments, contact Stephen at saldred@reorg.com and Shasha at sdai@reorg.com. Send your people and fund news to asiaeditorial@reorg.com.
Over the weekend, I read with delight the latest from one of my favorite writers, The Wall Street Journal sports columnist Jason Gay, a dispatch from the Beijing winter Olympic games. Brimming with Jason’s trademark wit and humor, his personal account of arriving at and staying in the bubble—greeted at the airport by men and women dressed in hazmat suits who gave “brain-tickling nasal swabs”—reminded me of my own experience when Beijing played host to an earlier Olympics, the 2008 summer games. Travelling with an infant, we visited family members and toured newly built venues like the Bird’s Nest and the Water Cube. My parents adorned their house with likenesses of the games’ five mascots, Beibei, Jingjing, Huanhuan, Yingying and Nini, the first words of whose names combined produce Bei Jing Huan Ying Ni, or Welcome to Beijing.
That in about 14 years, the host country has gone from opening its arms to international recognition and appreciation to being more assertive and inward-looking is probably commensurate with China’s ascension to the world’s second-largest economy. Christopher Johnson, president of risk advisory China Strategies Group in Washington, was quoted by WSJ as saying that China’s message is, “We’re here, get used to it.”
Nonetheless, China’s (slight) insecurities around the winter games, which have been diplomatically boycotted by the U.S. and other countries, created an opening that was aptly capitalized on by Russian president Vladmir Putin, who met for a summit in Beijing with his Chinese counterpart Xi Jinping just hours before the winter games began. The Kremlin lost no time in releasing a joint statement—which Chinese state media did not immediately release though made reference to it—that mentioned a redistribution of power and certain states that interfere in the affairs of other sovereign nations.
Images of Putin and Xi standing shoulder to shoulder are akin to giving the U.S. the middle finger (or two). Just hours earlier, the U.S. reported that Russia might be circulating allegedly fabricated videos of Ukraine attacks on Russian interests as a pretext for invading Ukraine. Both China and Russia have long imperial histories, feel that they have been wronged by capitalist powers and harbor geopolitical aspirations. Both have territories that they deem integral to their states—for Russia, it’s Ukraine; for China, Taiwan. Keeping Putin and Xi joined at the hip is their shared desire to stand up against Western military prowess and the conviction that they should divide spheres of influence in Eurasia and keep out U.S. sway.
That’s their beliefs now and here. Times change. Former British Prime Minister Henry Palmerstone once said, “We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.” After all, it was Stalin and Hitler who signed the German-Soviet Nonaggression Pact back in August 1939, on the eve of WWII, an agreement that was only to be shattered when German troops invaded the Soviet Union in June 1941. The Soviet Union then found itself forming alliances with the U.S. and Britain, only to push hundreds of miles past the German front lines, drop an iron curtain over Eastern and Central European countries shortly after the Nazis were defeated and witness the dawn of the Cold War with the West. Like the Warring States era in ancient China, the patterns of alliance and opposition are ever-shifting.
One may ask: What does all this have to do with distressed debt?
With the Chinese state being such an explicit player—in addition to its roles as the regulator and referee—in the restructuring of distressed companies, the government can no longer be brushed aside as an insignificant bystander and instead needs to be inspected and studied much as a marshal investigates its opponent ahead of major military actions. China Evergrande Group, after months of being incommunicado, held a conference call with investors on Jan. 26. Some may say the call was held in response to ratcheted up pressure from the ad hoc committee of bondholders who criticized the lack of meaningful actions from Evergrande to address its offshore liabilities. The ad hoc committee threatened legal actions, in response to which Evergrande pleaded more time and patience.
A source with knowledge of the situation said that since the parties signed an NDA in October, the ad hoc committee has not received much information from the company. Requests for comment sent to the publicly disclosed email addresses of financial advisors to Evergrande and the company’s risk management committee generated no response by press time.
The seven-member risk management committee, in particular, represents the state’s interests and has its own set of financial and legal advisors that are separate from the company’s. The mere presence of the state interest—even without Evergrande citing “its size, complexity of its businesses and the myriad of interested parties”—points to a drawn-out process. And this state player is a savvy one, which has dealt with international negotiations for a while. State news agency Xinhua issued a separate statement that referenced the joint statement with Russia but didn’t mention NATO, which served to appease Putin and at the same time preserved Xi’s bargaining power with the U.S.
If China could say to international sports spectators, “We’re here, get used to it,” then they could say to Evergrande bondholders, “Six months, that’s our timetable, deal with it.”
--Shasha Dai, Managing Editor
From Our Financial & Legal Analysts
Below are links to reports written this week by our financial and legal analysts.
- Shimao Group - Asset Disposal Analysis
- Yuzhou Properties - Tear Sheet
- Bankruptcy Industry Updates:
- Shandong Chenming Paper - Hong Kong Appeal Committee grants leave for Mainland incorporated Shandong Chenming Paper Holdings Limited to appeal ruling that Arjowiggins HKK 2 Ltd was entitled to present a winding up petition against it
AUSTRALIA
Greensill Capital / Katerra Inc.
Judge David Jones entered an order Jan. 25 approving a resolution of Katerra’s objection to Greensill Ltd.’s $440 million claim. The agreed order provides for the withdrawal of Greensill’s claim “with prejudice.” The order states further that Greensill “shall not continue to prosecute any of the Greensill Claims to final judgement on the merits against the Debtors or Wind-Down Debtors in this Court or any other jurisdiction, foreign or domestic.”
Read Reorg’s coverage of Greensill HERE and Katerra HERE.
Golden Energy / Stanmore SMC Holdings
PT Dian Swastatika Sentosa Tbk (DSST), the parent company of Singapore-listed Golden Energy and Resources Ltd., announced on Feb. 3 that the company will hold a general meeting of shareholders (GMS) on Feb. 7 at 9 a.m. Jakarta time, to seek shareholder approval for the proposed acquisition of Dampier (Queensland) Coal Pty Ltd.’s shares in BHP Mitsui Coal Pte. Ltd. by Stanmore SMC Holdings Pty. Ltd. (SMC) for upto $1.35 billion.
Read Reorg’s coverage of Golden Energy HERE.
Jindal Steel and Power / Wollongong Coal
Wollongong Coal Ltd. announced Jan. 24 that the Takeovers Panel had on the same day said that it has declined to conduct proceedings in regard to an application received from Gordon Elkington, in regard to an independent experts report (IER) provided by BDO in the context of a compulsory acquisition under the Corporations Act 2001 (Cth) which allegedly did not comply with section 667C(2) of the Act.
Read Reorg’s coverage of Jindal Steel HERE.
Nickel Mines Ltd.
Nickel Mines Ltd. on Jan. 28 released its activities report for the quarter ended Dec. 31, 2021, with Hengjaya Nickel and Ranger Nickel RKEF projects in Indonesia showing combined sales on a 100% basis of $187.1 million for 10,086.7 tonnes of nickel metal, down 0.3% from the September quarter, underlying EBITDA of $60.8 million and underlying net profit of $57 million.
Read Reorg’s coverage of Nickel Mines HERE.
David Jones
David Jones’ turnover and concession sales declined by 9.2% and by 9.0% in comparable stores for the half, but grew by 3.2% in the last six weeks of the 26 weeks ended Dec. 26, 2021. In line with a space reduction strategy, trading space reduced by a further 5.8% relative to the prior period. Online sales increased by 44.2% and contributed 28.1% to total sales during the period.
Read Reorg’s coverage of David Jones HERE.
Myer Holdings Ltd.
Myer Holdings Ltd. in a trading update for the five months to Jan. 1, 2022, said 27% of department store bricks and mortar trading days were lost during the period due to Covid-19 enforced closures, compared to 10% in the prior corresponding period, though total sales were up 12.3% over the prior corresponding period. Myer at end November signed a four-year agreement to refinance its existing credit facilities due for renewal in November 2022 with a four year asset based loan funding package consisting of a secured revolving credit and term loan facility with JPMorgan and Gordon Brothers.
Read Reorg’s coverage of Myer Holdings HERE.
CHINA
Aoyuan Group
An ad hoc group of noteholders of this developer are organizing and have engaged Moelis and Weil Gotshal as financial and legal advisors, respectively.
Read Reorg’s coverage on Aoyuan HERE.
China Evergrande Group
During a conference call with investors, Evergrande said it planned to release a preliminary debt restructuring proposal in six months. A source with direct knowledge of the matter, however, said that the ad hoc committee of bondholders has received little information from the company since signing an NDA in October.
Read Reorg’s coverage on Evergrande HERE.
Country Garden
During a conference call with investors, company management detailed plans for repaying due Jan. 27 and July 25 offshore notes. This real estate company, though less risky than others, nonetheless piqued investors’ interest in part due to its size. Country Garden also recently tapped the onshore bond market in what was seen as a bellwether deal.
Read Reorg’s coverage on Country Garden HERE.
Shimao Group
In a list of 36 projects for sale that was seen by Reorg, the projects are listed to have a total valuation of over RMB 77 billion and outstanding collateralized financings of RMB 53 billion. The company has engaged Deloitte to help negotiate with offshore bank lenders about financing for 2022. Its offshore notes dropped 6 to 8 points across the curve following the news.
Read Reorg’s coverage on Shimao Group HERE.
Ronshine China
This real estate developer has prepared sufficient funds for redeeming $198 million notes due Feb. 1 and flagged that it faces $456 million notes due March 1. If Ronshine fails to redeem the March notes, it may resort to a liability management exercise.
Read Reorg’s coverage on Ronshine HERE.
Jinke Property Group
This developer’s onshore bonds dropped following protests by creditors at the company’s headquarters in Chongqing, demanding payments a few days before the Chinese New Year. The protests were particularly violent for its kind according to video clips posted on social media. We reported that migrant workers have organized similar protests at China Overseas Property.
Read Reorg’s coverage on Jinke HERE.
Yunnan Energy
It is part of LGFV Yunnan Provincial Investment Group, or YPIG. During a roadshow management held with prospective investors, Yunnan Energy said that it planned to issue onshore notes to redeem a total of RMB 30.5 billion bonds maturing within one year and was trying to secure commitment to RMB 18 billion nonstandard financing.
Read Reorg’s coverage on YPIG HERE.
Times China
This real estate developer has been in the news lately as it faces near-term debt maturities. During a conference call that company management held with investors on Jan. 18, management said that the company was making preparations to allocate funds onshore for the redemption of two notes due in April. It also plans to repay syndicated loans maturing in May and October with its own cash resources.
Read Reorg’s coverage on Times China HERE.
Logan Group
During a project diligence trip Logan held with investors, management said it was still investigating links to the company of reported private notes. However, subsequently during private meetings with investors, Logan admitted that it has provided guarantees for $200M notes due March and $230M notes due May.
Read Reorg’s coverage on Logan Group HERE.
Yango Group
On the heels of completing an exchange offer, Yango was told by its home province of Fujian to work with state-owned asset management companies to bring in those AMCs as investors. The talks are at a preliminary stage, and the company confirmed it was in talks with strategic investors but declined to comment on the AMC involvement.
Read Reorg’s coverage on Yango HERE.
Sunac China
This fourth-largest real estate developer in China has faced liquidity pressure in recent months. An onshore subsidiary of Sunac has wired sufficient funds to repay an RMB 3.5B bond putable Jan. 22. The company’s offshore notes subsequently rose eight to 12 points across the curve. Then, on Jan. 20, we reported that Sunac had wired sufficient funds to redeem RMB 920 million ABS due Feb. 9.
Read Reorg’s coverage on Sunac China HERE.
INDIA/SOUTH ASIA
Future Retail Ltd.
The Supreme Court of India on Feb. 3 reserved its order on a plea filed by Future Retail Ltd. seeking permission to go ahead with proceedings in the National Company Law Tribunal, where the company has sought approval for its proposed INR 247.13 billion ($3.273 billion) merger of Future Group with certain units of Reliance Industries.
The Supreme Court of India on Feb. 1 set aside the Oct. 29 and Feb. 2 Delhi High Court orders, and directed the high court judges to consider the matter on its own merits. The Oct. 29 Delhi High Court single bench order refused to provide relief to Future Retail’s appeal seeking a stay on the enforcement of an Oct. 25, 2020, SIAC emergency arbitrator award, which was in Amazon.com NV Investments Holdings LLC’s favour.
Read Reorg’s coverage on Future Retail HERE.
Birla Tyres Ltd.
The Competition Commission of India (CCI) has passed an order under section 3 of the Competition Act, 2002, against Birla Tyres Ltd. imposing a penalty of INR 1.783 billion ($23.8 million). The tyre manufacturer company said it is yet to receive the CCI order and believes that the company has sufficient grounds for an appeal.
Read Reorg’s coverage on Birla Tyres HERE.
Vedanta Resources Ltd./ Vedanta Ltd.
Vedanta Ltd. clarified that recent media reports suggesting that the company has had preliminary discussions with prospective advisors about combining the company with Vedanta Resources Ltd. were “speculative and misleading” to investors. The company further detailed that no such proposal was “under consideration” and denied the media reports.
Read Reorg’s coverage on Vedanta Ltd. HERE and Vedanta Resources Ltd. HERE.
Dewan Housing Finance Corporation Ltd.
Dewan Housing Finance Corporation Ltd., (also known as Piramal Capital & Housing Finance Ltd.), said that the National Company Law Appellate Tribunal has ordered the committee of creditors to reconsider the extent of challenging the distribution of proceeds (if any) from fraudulent transactions to the benefit of the resolution applicant.
Read Reorg’s coverage on Dewan Housing Finance HERE.
Bankruptcy Industry Update
The National Asset Reconstruction Company Ltd. (NARCL) and India Debt Resolution Company Ltd. (IDRCL) have received requisite approvals, including that from the Reserve Bank of India, to commence operations. Multiple state-owned as well as private banks have so far identified 38 non-performing assets (NPA) worth INR 830 billion ($11.07 billion), and the transfer will happen in a phased manner. In the first phase, the banks will transfer 15 NPA accounts aggregating to INR 500 billion in the current financial year ending March 31.
Read Reorg’s coverage of Bankruptcy Industry Updates HERE.
Indiabulls Housing Finance
An Edelweiss Group fund on Dec. 31 concluded the purchase of INR 2.10 billion ($28. 2 million) out of a total of INR 3.88 billion pass-through certificates (PTCs) backed by retail loans including housing loan receivables issued by Retail Securitisation Opportunities Trust. The INR 2.10 billion loans which are to be held by Edelweiss will be senior in the structure and pay an internal rate of return of 19.5%.
Read Reorg’s coverage on Indiabulls Housing Finance HERE.
SOUTHEAST ASIA
Noble Group Holdings Ltd.
Noble Group Holdings Ltd. announced Jan. 25 that its deleveraging and reorganisation continues to be implemented in accordance with terms in its original statement of Dec. 17, 2021, and that the board is working in full cooperation with the ad hoc group (AHG) representing more than 80% in principal value of the outstanding 2023 notes in accordance with terms of the lock-up agreement.
Read Reorg’s coverage on Noble Group HERE.
Sri Rejeki Isman Tbk (Sritex)
Lender banks Citibank N.A. Jakarta and Taipei Fubon Commercial Bank, whose votes were not included in the tally which approved Sritex’s contested revised composition plan - a vote which ultimately ended its in-court supervised restructuring, or PKPU - are considering filing a cassation case to the Indonesian Supreme Court which, if successful, would enter the company into bankruptcy.
Read Reorg’s coverage of Sritex HERE.
Serba Dinamik Holdings Bhd.
The company at its Jan. 31 annual general meeting (AGM) told shareholders that it is still in the midst of “engaging with financiers'' to put together a proposal for its restructuring including an amended payment plan. At the AGM, the management also disclosed that the significant majority of SDHB’s MYR 346.5 million ($82.9 million) trade receivable impairments and MYR 552.6 million inventory write-downs incurred in the fiscal year ended June 2021 are attributable to the company’s operations in Malaysia and the United Arab Emirates.
Read Reorg’s coverage of Serba Dinamik HERE.
Garuda Indonesia (Persero) Tbk
At a virtual hearing at Indonesia’s House of Representatives held Jan. 25, state-owned enterprises minister Erick Thohir said that seven large lessors of the Indonesian flag carrier have formed an ad hoc committee, with four of the seven so far agreeing with the carrier’s restructuring proposal. Meanwhile, under its new PKPU timeline, the decision on whether to proceed with voting on Garuda’s composition plan or to extend its PKPU will be held on March 15.
Read Reorg’s coverage of Garuda Indonesia HERE.
Pan Brothers Tbk
Shareholders of Pan Brothers have approved a motion to issue an up to $350 million bond for a maximum of five years and at a maximum fixed interest rate of 12%, at the company’s extraordinary general meeting held in Jakarta Jan. 26. In addition, shareholders also approved the company and/or its subsidiaries providing guarantees in the form of corporate guarantees and/or security over assets representing more than 50% of total net assets in relation to future financing plans.
Read Reorg’s coverage of Pan Brothers HERE.
Gajah Tunggal Tbk
Deutsche Bank, Emirates NBD and HSBC have provided a $200 million amortizing loan to Giti Tire with proceeds to refinance existing debt, including short-term borrowings of the borrower group, and for working capital purposes, said two sources familiar with the matter.
Read Reorg’s coverage of Gajah Tunggal HERE.
PT Agung Podomoro Land Tbk
The Indonesian property developer announced Feb. 3 that it recorded IDR 2.7 trillion ($187.8 million) in marketing sales for 2021 - exceeding its earlier target of IDR 2 trillion for the full year - driven by the “acceleration of the development of new property projects” which were able to meet the current needs of consumers.
Read Reorg’s coverage of Agung Podomoro Land HERE.
PT Kawasan Industri Jababeka Tbk (Jababeka)
A notice from Jababeka published Feb. 2 in local daily newspaper Investor Daily shows a third AGM for the company scheduled for Feb. 23 at 10 a.m. JKT, for shareholders to vote on resolutions relating to the provision of corporate guarantees by the company’s subsidiaries for its $350 million contemplated notes and an amendment and restatement of the company’s articles of association.
Read Reorg’s coverage of Jababeka HERE.
Week Ahead
Below is a list of events on the Reorg Asia Calendar for the next two weeks
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