(Yicai Global) Nov. 3 -- Baoding Tianwei Group Co., a power-equipment manufacturer and subsidiary of central government-owned China South Industries Group Corp., has released details of its bankruptcy.
Baoding Tianwei became China's first state-owned company to default on domestic debt in April this year when it told creditors it may miss an interest payment of CNY85.5 million yuan (USD13.8 million) interest payment.
The draft filed by the company's bankruptcy trustee writes that simple contract creditors will be paid off with 30 percent of the amount of claims, 70 percent of which are exempted.
Moreover, the 30 percent of debts will be offered by installment within eight years. Repayment of the same amount of cash starts in the fifth year with no interest in the debt repayment period.
In short, merely CNY9.2 billion worth of debts have been confirmed for simple contract creditors, who vetoed a proposal for a low liquidation rate of 30 percent and the great uncertainty posed by the relatively long repayment cycle.
The fourth tranche of bonds previously issued on the bond market totaling at CNY4.5 billion, all of which belong to simple contract creditors, have all defaulted.
In addition, both employee creditors and creditors with claims secured by property voted against the proposal. Sponsors, tax, employee, those with claims secured by property and simple contract creditors all attended the meeting. Of these, sponsors and tax creditors and those owed a small amount of debts voted for the long term proposal.
The bankruptcy law stipulates that a trustee can revise the restructuring plan if creditors vote against their proposal. However, if the vote fails to pass for the second time, creditors or the trustee can apply for a mandatory court ruling.