Sino-Ocean Group, a Chinese state-backed property developer, has achieved a significant milestone in its efforts to restructure approximately $6 billion of its offshore debt. London's High Court granted approval for the company's debt restructuring plan on Monday, despite facing opposition from an ad hoc group of creditors. This development marks a crucial step in Sino-Ocean's strategy to manage its financial obligations in the wake of the Chinese property sector's 2021 debt crisis.
The company, based in Chengdu, Sichuan province, is navigating its financial restructuring through a dual-track process in both London and Hong Kong. This approach aims to address the company's offshore debt challenges while maintaining its viability and state ownership status in China. The approval by London's High Court underscores the legal backing of Sino-Ocean's plan, which is deemed necessary for its continued operations within the Chinese market.
Sino-Ocean's lawyers have emphasized the importance of the company remaining under Chinese state ownership to ensure its long-term success in the domestic property market. This stance aligns with the broader context of the Chinese property sector, where several developers have defaulted following the sector's debt crisis in 2021. The crisis prompted a reevaluation of financial strategies among property developers across the country.
The restructuring plan, valued at approximately $6 billion, is designed to stabilize Sino-Ocean's financial standing and facilitate its ongoing operations. The involvement of legal experts in the restructuring process highlights the complexity and significance of navigating international financial regulations while addressing domestic market requirements.
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