‘ Most Chinese creditors agree’ on Huishan restructuring plan

Embattled China Huishan Dairy Holdings Co said on Wednesday that the company and its chairman have agreed with a majority of Chinese creditors to restructure the company’s huge outstanding debts.

The company, considered to be China’s largest integrated dairy, has been battling for survival with debt of at least $ 3.9 billion owed 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 it lost contact with a key executive in charge of its fi nances 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 company said in a statement to the Hong Kong stock exchange.

The creditors represented more than two- thirds of the outstanding amount owed by Huishan or companies controlled by Yang, it added.

Operations are continuing as normal with support from the local government, domestic banks and suppliers, it said. It aimed to have positive cash fl ow 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 as part of restructuring plans, and it was looking for a “white knight” for fi nancial support.

Huishan added that Champ Harvest, an entity that holds 71 percent of Huishan’s shares and was controlled by Huishan’s chairman Yang, had been served by a creditor with an application for starting liquidation proceedings.