(Yicai) Dec. 4 -- Shares of Oceanwide Holdings slumped by the exchange-imposed daily trading limit after a Beijing court terminated the pre-restructuring procedures of the debt-ridden Chinese financial and real estate holding firm.

Oceanwide [SHE: 000046] closed 5.4 percent down at 88 Chinese cents (12 US cents) in Shenzhen today. As a listed firm with delisting risk, Oceanwide has a daily trading limit of 5 percent instead of 10 percent.

The Beijing No. 1 Intermediate People's Court has accepted the request of Zhong Lun Law Firm, the temporary administrator of Oceanwide's restructuring plan, to terminate the preparation procedures for the restructuring, the Beijing-based real estate company announced late on Dec. 1.

At the end of April, Oceanwide said in a statement that its creditor Beijing Shiwang Assets Management had applied to a Beijing court for reorganization and pre-restructuring because the firm had failed to pay off its debts and its assets were no longer sufficient to clear its arrears. The pre-restructuring will facilitate Oceanwide's communication with creditors and intentional investors in advance, thereby improving the efficiency and success rate of subsequent restructuring work, it added.

Oceanwide's excessive liability ratio may be the reason behind the termination of the pre-restructuring. The company reported liabilities equal to 108 percent of its total assets as of Sept. 30, with net assets of minus CNY12.1 billion (USD1.7 billion).

If Oceanwide's assets and liabilities do not improve before the end of the year, the firm's delisting risks will aggravate, as the court ruled to terminate the pre-restructuring, according to Oceanwide's statement on Dec. 1.

Restructuring is not the only means to solve Oceanwide's debt issue, Li Minghai, chairman of the board of supervisors at the company's parent firm China Oceanwide Holdings Group, told investors. The group is operating normally, and the core staff and executives are exercising their duties as usual, Li added.

On Nov. 30, Oceanwide was criticized by the Shenzhen Stock Exchange for failing to disclose late payments of various major debts between Sept. 2021 and February, with the cumulative principle of these debts totaling CNY19.4 billion.

Editors: Dou Shicong, Futura Costaglione