Chinese developer Logan's liquidation lawsuit adjourned on potential new petitioner (updated)

Logan

15/01/2024 06:18

(Adds details from hearing in paragraphs 1-3, 9-10;
restructuring plan in paragraph 5-6)
       HONG KONG, Jan 15 (Reuters) - A group of banks may seek
to take on the lawsuit to liquidate Chinese property developer
Logan Group  3380.HK  after the original petitioners told the
court on Monday they would drop the case.
    The latest development came after the Shenzhen developer
said on Friday it had signed an agreement with a key bondholder
group on the terms of restructuring its $6.6 billion in offshore
debt. 
    The Hong Kong High Court on Monday adjourned the 
liquidation proceedings for four weeks to give the group of
banks time to decide whether they would replace the original
petitioners.
    The original petitioners, holding Logan's 5.75% 2025 bond,
filed a winding-up petition against the developer and its two
units in Nov. 2022 through Citicorp International, the bond
trustee.     
    Logan, which stopped making offshore repayments in August
2022, said the restructuring plan includes four options for
creditors to swap part of their debt to cash, new notes and/or
convertible bonds.     
    The company said in its filing on Friday that it aimed to
cut its offshore debt by between $2.6 billion and $3 billion as
its estimated cumulative cash for offshore repayments is between
$4 billion and $4.7 billion during the restructuring period.    
    Shares of Logan firmed 8.3% by Monday noon, after they were
suspended from trading on Friday.
    A number of Chinese developers, including China Evergrande
Group  3333.HK  and Country Garden  2007.HK , have defaulted
their offshore debt and entered into restructuring process since
the sector was embroiled in a debt crisis since mid-2021.
    During the hearing on Monday, Judge Anthony Chan said he
found it "odd" that the group of banks did not get involved in
the Logan discussions earlier and he did not want the case to
drag on much longer. 
    A lawyer representing the banks told the court that Logan
had provided little information on the restructuring terms prior
to the announcement last Friday. 

 (Reporting by Clare Jim; Editing by Anne Marie Roantree, Kim
Coghill and Sonali Paul)
 ((clare.jim@thomsonreuters.com))