Guangdong Adway outlines debt restructuring to trim amounts owed

By Marisa Wong

Los Angeles, Sept. 22 – Guangdong Adway Construction (Group) Holdings Co. Ltd. made an announcement on Friday about restructuring transactions including, among a number of other transactions, a debt restructuring.

The company said it has been having financial distress and is currently unable to repay some of its liabilities.

As of May 31, the company’s estimated total debts and liabilities to be restructured amounted to about RMB 668,533,000, or roughly HK$728,700,970.

Under the circumstances, the company proposed to implement a debt restructuring, under which the company aims to reach consensus with the creditors on a haircut on the amount of the debt from the roughly RMB 668,533,000 to about RMB 185,705,000, or equivalent to about HK$202,418,450.

The target reduced debts will be settled by way of realization of some of the company’s assets, such as an office property, a foreign investment, certain account receivables and cash, in the estimated aggregate amount of RMB 135,705,000, or HK$147,918,450, and the aggregate cash proceeds of about HK$54,536,150, equivalent to roughly RMB 50 million, which are to be funded by domestic shares subscriptions and the placing of H shares.

The company announced on Friday that it entered into domestic shares subscription agreements to issue a total of 218 million new domestic shares at the subscription price of HK$0.185 per share. The company also entered into a placing agreement with Sheng Yuan Securities Ltd. as agent to sell on a best-effort basis up to 76.79 million new H shares at a price of HK$0.185 per share.

The debt restructuring will be subject to acceptance or approval of the creditors, the Shenzhen Court and relevant regulators where applicable.

Upon completion of the debt restructuring, the debts due to the creditors and related liabilities will be compromised, discharged, waived and/or settled in full.

The Shenzhen, Guangdong, China-based company is principally engaged in provision of interior and exterior building decoration and design services in China.

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