(Yicai Global) April 28 -- Shares of Oceanwide Holdings, which is at risk of a stock market delisting, jumped after the Chinese conglomerate said it had received a court-issued pre-restructuring notice yesterday.

Oceanwide [SHE: 000046] closed up 7.5 percent at 86 Chinese cents (12 US cents) a share in Shenzhen today, still below CNY1 for the 11th straight trading day. According to regulations, stocks that close below CNY1 for 20 trading days in a row will be delisted.

A Beijing court has decided to initiate pre-restructuring of the company, which will facilitate its communication with creditors and prospective investors in advance, thereby improving the efficiency and success rate of subsequent restructuring work, Oceanwide announced yesterday evening.

Oceanwide creditor Beijing Shiwang Asset Management applied to the court on April 25 for reorganization and pre-restructuring of Oceanwide because the firm had failed to pay off its debts and its assets were no longer sufficient to clear its arrears.

As a large investment group spanning finance and real estate, Oceanwide has had a cash crunch since 2020 and has suffered huge losses for three consecutive years.

According to a January statement, the firm’s net loss in 2022 is expected to have been between CNY7 billion (USD1 billion) and CNY10 billion, and its negative net asset could be as much as CNY3.6 billion by the end of the year.

To ease its debt pressures, Beijing-based Oceanwide has sold assets on many occasions, including transferring its 30.3 percent stake in Minsheng Securities to Guolian Group last month for CNY9.1 billion, which reduced its interest in the broker to less than 1 percent.

Editors: Dou Shicong, Peter Thomas