China Energy Reserve updates holders on 2022 bond’s court proceedings

By Marisa Wong

Los Angeles, March 23 – China Energy Reserve and Chemicals Group Co. Ltd. (CERCG) issued an update on legal proceedings relating to the HK$2 billion 6.3% guaranteed bonds due 2022 issued by China Energy Reserve and Chemicals Group Overseas Co. Ltd. (CERCG Overseas) and guaranteed by CERCG.

Holders of the $265 million of 6¼% guaranteed bonds due 2019 (ISIN: XS1524892939) issued by China Energy Reserve and Chemicals Group International Holding Ltd. (CERCG International) and guaranteed by CERCG were also notified of the latest proceedings relating to the 2022 bonds.

According to Wednesday’s announcement, on March 18 the court in Hong Kong delivered its decision and ordered, among other things, the following:

• With respect to the joinder application announced on Jan. 10, that China Life be substituted as the plaintiff and that the trustee be joined as an interested party in the ongoing legal proceedings regarding the 2022 bonds;

• With respect to the garnishee application, upon the undertaking given by China Energy Reserve and Chemicals Trading Co. Ltd., CERCG Overseas and CERCG to the court and their creditors that the group would not dispose of or remove the $120 million deposit except with the leave of the court, and the court’s acceptance of that undertaking for 14 days, the garnishee order nisi be made absolute save as to the amount of $70 million; and in the absence of an application by any interested party in respect of the amount of $70 million within 14 days of the date of the court’s decision, that the undertaking will be discharged; and

• That the setting aside application (the application by CERCG Overseas to set aside the garnishee application on the ground of material non-disclosure) be dismissed.

CERCG International and CERCG are taking legal advice in relation to the ongoing legal proceedings for the 2022 bonds, according to Wednesday’s notices.

The company confirmed that all interest and principal payments on the outstanding bonds continue to be suspended pending further notice.

The company provides energy development services and is based in Beijing.

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