Fitch: China Fishery's Winding-Up Risks Reduced; Uncertainties Remain

China Fishery

07/01/2016 05:52

(The following statement was released by the rating agency)

HONG KONG, January 07 (Fitch) Fitch Ratings says that the risk of China Fishery 
Group Limited (China Fishery, Issuer Default Rating: C) being liquidated has 
been reduced after the High Court of Hong Kong's order to remove its provisional 
liquidators. 

The court decision came after China Fishery's parent, Pacific Andes 
International Holdings Limited (Pacific Andes), reached an agreement with a 
majority of China Fishery's club loan lenders in December 2015. In return for 
the lenders' support to dismiss the winding-up petition filed by HSBC, Pacific 
Andes has agreed to a number of measures to restructure China Fishery. These 
measures include an independent accounting review, appointment of a chief 
restructuring officer and new CFO, as well as disposal of key assets. 

There are several key events to watch in the coming few weeks: the court 
hearings on 8 January and 27 January 2016 on the winding-up petition by HSBC in 
which the petition could be dismissed, as well as the coupon payment on January 
30 for China Fishery's USD300m 9.75% senior notes. 

If the outcomes of these events are favourable to Pacific Andes, Fitch will 
review the ratings for China Fishery and consider positive rating action. If the 
company fails to pay the coupon after a 30-day grace period, the ratings will be 
downgraded to 'RD', indicating a restricted default.

In addition, Pacific Andes has also announced that it has received non-binding 
memorandums of understanding from two potential buyers for China Fishery's 
Peruvian business at an indicative enterprise value of USD1.7bn. The Peruvian 
business is China Fishery's key asset, and accounts for the vast majority of 
China Fishery's revenue and EBITDA. In the event of a sale, Fitch believes that 
there will be substantial improvement in China Fishery's financial profile, but 
the remaining company would have a vastly changed business profile. Fitch 
believes that the Peruvian business is the most stable of China Fishery's 
different segments.

The provisional liquidators did not participate in Fitch's analytical process.

Contact: 

Yee Man Chin

Director

+852 2263 9696

Fitch (Hong Kong) Limited 

19/F, Man Yee Building 

68 Des Voeux Road, Hong Kong

Yi Zhang

Analyst

+85 21 5097 3390

Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: 
wailun.wan@fitchratings.com.

Additional information is available on www.fitchratings.com

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