Bankrupt Ferro China resumes operations under close scrutiny of a court to repay its debt.
Gong Jing, Caijing 19 December 2008
The city court of Changshu, Jiangsu province, has ordered troubled galvanized steel producer Ferro China to commence bankruptcy procedures, as a step to push forward a possible restructuring of the company.
A senior source at Ferro China confirmed with Caijing that five subsidiaries of the Singapore-listed Ferro China in Changshu city started the restructuring process, expected to last six months, on November 28 under orders from the local court.
Caijing learned from Changshu city court records that the court had approved requests from six banks, including the local branch of China Construction Bank, Bank of China and the Suzhou branch of Standard Chartered Bank, to consider the restructuring of Changshu Everbright Material Technology Company, one of Ferro China’s core assets.
Another four subsidiaries of Ferro China – Changshu Xinghai Xinxing Construction Material Company, Changshu Xingyu Xinxing Construction Material Company, Changshu Xinggao Xinxing Construction Material Company and Changshu Changgang Company – also started restructuring procedures.
Operations of Changshu Everbright and other Ferro China plants have been halted since October, when the company reportedly was unable to repay debt totaling billions of yuan.
According to China’s Bankruptcy Law, creditors can apply for a court order to start the restructuring of companies unable to repay debts. The process is designed to allow debtors to resume operations in an aim to fulfill their debts.
During the process, the court appointed Jiangsu Zhuhui Law Office as the supervisor of Ferro China, responsible for overseeing Ferro’s companies’ operations and management. If the companies fail to provide a proper restructuring plan, or the operations continue to worsen during the period, the court will call a halt to the process and announce bankruptcy.
Early in October, days after Ferro China’s problems became public, a Changshu government spokesperson told Caijing that the company’s plants would resume operations no later than November 8. But none of the plants reopened at that time. However, local government has reiterated that they are pushing for rapid progress on Ferro China’s restructuring plane.
It was not until December 17 that a senior Ferro China source confirmed that two of its subsidiaries’ production lines recently resumed operations.
Ferro China, a flagship enterprise in Changshu, was unable to repay a total of 5.2 billion yuan in debts in early October. On October 8, it was discovered that 20 of the company’s senior Taiwanese managers had returned to Taiwan. Trading in Ferro China’s stock on the Singapore stock exchange was suspended on October 10.
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Ferro China Starts Restructuring Procedures
Bankrupt Ferro China resumes operations under close scrutiny of a court to repay its debt.
Gong Jing, Caijing
19 December 2008
The city court of Changshu, Jiangsu province, has ordered troubled galvanized steel producer Ferro China to commence bankruptcy procedures, as a step to push forward a possible restructuring of the company.
A senior source at Ferro China confirmed with Caijing that five subsidiaries of the Singapore-listed Ferro China in Changshu city started the restructuring process, expected to last six months, on November 28 under orders from the local court.
Caijing learned from Changshu city court records that the court had approved requests from six banks, including the local branch of China Construction Bank, Bank of China and the Suzhou branch of Standard Chartered Bank, to consider the restructuring of Changshu Everbright Material Technology Company, one of Ferro China’s core assets.
Another four subsidiaries of Ferro China – Changshu Xinghai Xinxing Construction Material Company, Changshu Xingyu Xinxing Construction Material Company, Changshu Xinggao Xinxing Construction Material Company and Changshu Changgang Company – also started restructuring procedures.
Operations of Changshu Everbright and other Ferro China plants have been halted since October, when the company reportedly was unable to repay debt totaling billions of yuan.
According to China’s Bankruptcy Law, creditors can apply for a court order to start the restructuring of companies unable to repay debts. The process is designed to allow debtors to resume operations in an aim to fulfill their debts.
During the process, the court appointed Jiangsu Zhuhui Law Office as the supervisor of Ferro China, responsible for overseeing Ferro’s companies’ operations and management. If the companies fail to provide a proper restructuring plan, or the operations continue to worsen during the period, the court will call a halt to the process and announce bankruptcy.
Early in October, days after Ferro China’s problems became public, a Changshu government spokesperson told Caijing that the company’s plants would resume operations no later than November 8. But none of the plants reopened at that time. However, local government has reiterated that they are pushing for rapid progress on Ferro China’s restructuring plane.
It was not until December 17 that a senior Ferro China source confirmed that two of its subsidiaries’ production lines recently resumed operations.
Ferro China, a flagship enterprise in Changshu, was unable to repay a total of 5.2 billion yuan in debts in early October. On October 8, it was discovered that 20 of the company’s senior Taiwanese managers had returned to Taiwan. Trading in Ferro China’s stock on the Singapore stock exchange was suspended on October 10.
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