China Metal Resources units to file bankruptcy to restructure debt

By Marisa Wong

Los Angeles, June 6 – China Metal Resources Utilization Ltd. announced that wholly owned subsidiary Mianyang Tongxin Copper Co., Ltd. and Tongxin’s wholly owned subsidiary, Mianyang Jin Xunhuan Metal Materials Co., Ltd., intend to restructure their existing debt through the applicable provisions of China’s Enterprise Bankruptcy Law.

The restructuring will involve the filing of a voluntary application for bankruptcy reorganization with the People’s Court of Youxian District of Mianyang City in China’s Sichuan province. The filing is scheduled to take place on June 6, according to a company notice on Monday.

China Metal’s board believes that this method gives the subsidiaries a way to restructure their existing debt with the relevant creditors with the sanction by the court.

If implemented, the debt restructuring would reduce the debts of the subsidiaries, release the intrinsic value and business potential of the quality assets currently held by the subsidiaries and allow the subsidiaries to fully utilize those assets to increase revenue generation ability.

The subsidiaries’ major creditors have expressed their support for the debt restructuring, China Metal noted. Subject to the successful implementation of the restructuring, institutional creditors are willing to continue to provide financing facilities to the subsidiaries, while suppliers are willing to extend the settlement dates of the relevant payables.

With the creditors’ support, the board believes that the subsidiaries would be able to continue as a going concern after the debt restructuring.

The subsidiaries have also conducted in-depth communication with strategic investors in relation to future financing plans. Several strategic investors have expressed their preliminary interests in investing in the subsidiaries after the debt restructuring, according to the notice.

Subject to the court’s discretion, the restructuring may involve the appointment of provisional administrators, the introduction of strategic investors and the coordination of negotiations amongst creditors in order to formulate debt restructuring plans.

Based on the company’s understanding, until the end of the debt restructuring, the subsidiaries can continue their business operations.

The Mianyang, China, company is a manufacturer of recycled copper products, communication cables and power transmission and distribution lines.

© 2015 Prospect News.
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