For the routine procedure of US dollar debt restructuring, Rongchuang China: has submitted a US Chapter 15 certification application
On September 19th, Pengpai News learned that Sunac China has applied for Chapter 15 certification from a US court regarding the restructuring of US dollar bonds, in order to obtain recognition from the US court for Sunac China's agreement to arrange the restructuring in Hong Kong.
A lawyer has stated that "applying for Chapter 15 certification can prevent creditors from using New York law to evade the restructuring provisions that have already been ruled by Hong Kong courts and to avoid fulfilling their obligations under the restructuring provisions. As Sunac China's US dollar bonds are governed by New York law in the United States, the restructuring conducted by Sunac China in Hong Kong must obtain Chapter 15 certification in the United States to ensure its effectiveness in the United States. In restructuring cases of non US companies, Chapter 15 certification is a routine procedure. The certification process itself does not change any provisions of the restructuring agreement, and the interests of creditors will be completely consistent with the agreement arrangements ruled by Hong Kong courts."
The outline of Chapter 15 of the U.S. Bankruptcy Law regulates auxiliary cases and other cross-border cases, allowing foreign debtors to apply to the court in the United States, and the court will rule to recognize "extraterritorial procedures", protect the debtor's assets and maximize their value, so as to achieve the purpose of bankruptcy protection. Therefore, according to Chapter 15, the cases applied for are mainly subsidiary proceedings of the main proceedings filed in another jurisdiction. Chapter 15 proceedings are not bankruptcy applications, and Chapter 15 bankruptcy protection aims to provide enterprises with an opportunity for debt restructuring to protect the interests of creditors.
On the evening of September 18th, Rongchuang China disclosed the progress of overseas debt restructuring. A total of 2019 plan creditors holding a total of $9922717051 in voting plan debt principal and accrued unpaid interest attended the plan meeting and voted in person or appointed representatives. A total of 2014 plan creditors holding a total of $9753677916 in voting plan debt principal and accrued unpaid interest voted in favor of the plan, with a approval rate of 99.75% among creditors. Therefore, the plan has been approved by the majority of plan creditors as required.
In addition, Rongchuang China announced in its announcement that it plans to raise the maximum limit of mandatory convertible bonds in the US dollar debt restructuring again, from 2.2 billion US dollars to 2.75 billion US dollars. Other debt to equity conversion options in the comprehensive debt restructuring plan are expected to reduce the total amount of debt through debt to equity conversion by Rongchuang, which is expected to exceed 4.5 billion US dollars.
