Indebted Xiwang Group Creditors Approve Settlement Plan

Creditors of the debt-ridden corn-steel-processing conglomerate Xiwang Group Co. Ltd. on Tuesday approved a draft settlement proposal to repay part of its 16.7 billion yuan ($ 2.36 billion) in liabilities, marking a new milestone in efforts to repay bondholders and save the private company from liquidation.

Nearly 90% of the 374 creditors present at the meeting convened by internet, voted in favor of (link in Chinese) the offer made by the administrator appointed by the Xiwang court to oversee the company’s affairs, people familiar with the matter told Caixin. The 335 who agreed to the plan owe about 12.4 billion yuan, or 86.4 percent of the company’s total unsecured debt, the sources said.

The administrator will now submit the draft settlement proposal to the court for approval, according to a statement from Xiwang Foodstuffs Co. Ltd., a subsidiary of the Xiwang Group, listed in Shenzhen, released after the meeting.

Xiwang, one of the largest private enterprises in the eastern industrial province of Shandong, filed in conciliation (link in Chinese) under Chinese bankruptcy law last month in a court in Zouping city where its headquarters are located, claiming it could not repay maturing loans and that its assets were insufficient to pay off all his debts. Under the country’s bankruptcy laws, Xiwang is allowed to seek a compromise or debt settlement with his creditors, and he has submitted a proposal to the court.

Court approval

On October 24 last year, the company failed to repay 1 billion yuan of matured short-term commercial paper, triggering defaults on four other debt securities amounting to 2.3 billion yuan. yuan. According to Xiwang’s 2019 financial statements, the company had total assets of 15.5 billion yuan with liabilities of 16.7 billion yuan at the end of last year. On Thursday, a total of 473 creditors filed claims against Xiwang Group for 20.2 billion yuan, according to documents viewed by Caixin. But the 410 creditors representing 13.9 billion yuan of the total have not yet been verified by the director of the company.

Zhang Yuzhe contributed to this report.

An earlier version of this story mistakenly referred to Xiwang as bankrupt and said that she had filed for bankruptcy. The story has been corrected to reflect that Xiwang filed for conciliation under Chinese bankruptcy law.

Contact reporter Tang Ziyi ([email protected]) and editor Nerys Avery ([email protected])

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