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Journalism of Courage
Embattled China Huishan Dairy Holdings Co Ltd said late on Wednesday the firm and its chairman had come to an agreement with a majority of their Chinese creditors to restructure the firm’s huge outstanding debts. The firm, billed as China’s largest integrated dairy, has been battling for survival under a crippling debt load of at least $3.9 billion owned to creditors including HSBC and Industrial and Commercial Bank of China.
Huishan hit the headlines when its stock plunged 85 percent in March before being suspended. Since then most of its directors have quit, it has missed loan payments and lost contact with a key executive in charge of its finances and cash.
More than half of the Chinese creditors to Huishan and its chairman, Yang Kai, had “signed an agreement to act in concert and support, in principle, an overall debt restructuring”, the firm said in a statement to the Hong Kong stock exchange.
The creditors represented over two-thirds of the outstanding amount owned by Huishan or firms controlled by Yang, it added. Operations were continuing as normal due to support from local government, domestic banks and suppliers, it said. It aimed to have positive cash flow from normal operating activities by the end of March next year.
Huishan said in July it planned to carve up shares in the company among its creditor banks and shareholders as part of restructuring plans, and that it was ultimately looking for a “white knight” to financially support the firm.
Huishan added Champ Harvest, an entity which holds 71 percent of Huishan’s shares and was controlled by Huishan’s chairman Yang, had been served by a major creditor with an application for starting liquidation proceedings.
