Times China Holdings Ltd, a Chinese builder that defaulted on offshore borrowings more than one year ago, is accelerating debt restructuring talks in a development that could help reduce the risk of liquidation, said people familiar with the matter. 

The Guangdong-based developer started to communicate with its major creditors, including banks and bondholders, almost on a daily basis after receiving a liquidation petition in April, said the people, who asked not to be identified as the matter is private. That followed slower initial progress after a financial adviser for Times China had come up with a rough plan months ago, according to the people.

Times China’s debt talks are still ongoing and the two sides haven’t agreed on a plan yet, the people said. Key issues under discussion include how much haircut creditors need to take, the size of upfront cash payments and tenor extensions, they said. The firm’s first liquidation hearing is set for July 3. 

Times China didn’t immediately reply to requests for comment.

The Times China case is one of the latest examples of offshore creditors turning to Hong Kong courts to push beleaguered Chinese developers back to the negotiating table. More than 20 Chinese property firms have received winding-up petitions in the past few years, according to Bloomberg-compiled data, including Sino-Ocean Group Holding Ltd, which received one this month. 

Times China has total assets of 121 billion yuan (US$16.7 billion) as of end-2023. About 15 months after the firm halted offshore debt payments, Hong Kong-based lender Hang Seng Bank Ltd filed a winding-up petition against it. 

In prior winding-up hearings, showing progress on debt talks has been an important factor in having cases adjourned or even dismissed. 

Times China’s offshore notes now trade at around two cents on the dollar, Bloomberg-compiled data show, indicating extremely low recovery expectations among investors.

  - Bloomberg