(Yicai) July 19 -- Sino-Ocean Group’s shares rose after the Chinese developer said its plan to restructure USD5.6 billion of offshore debt has received or is in the process of receiving the approval of lenders that represent about half of its Class A debt.

Sino-Ocean [HKG: 3377] closed 1.3 percent higher at 38 Hong Kong cents (5 US cents) a share today, after earlier surging by as much as 10.5 percent.

After a few months of constructive dialogue, Sino-Ocean has made significant progress regarding the proposal, the Beijing-based company said in an exchange filing yesterday.

“The restructuring is intended to maximize recoveries for the creditors while providing fair and equitable treatment to all and establish a long-term and sustainable capital structure for the company,” it said.

Sino-Ocean invites the remaining lenders to consider the proposal’s terms and support its implementation, the firm noted, adding that it will offer financial incentives based on the principal amount of their debt and the order in which they signed.

Those signing before Aug. 8 will receive a payment equal to 0.1 percent of the principal amount of their debt, while those doing so between Aug. 8 and 22 will receive a 0.05 percent fee.

In a separate statement yesterday, Sino-Ocean said the date for Hong Kong’s high court to hear the winding-up petition filed against the company last month by the London branch of Bank of New York Mellon has been set for Sept. 11.

Sino-Ocean defaulted in August last year, when it failed to pay the USD20.9 million interest on an overseas bond amid the prolonged downturn in China’s real estate market. The builder halted payments on all of its offshore debt the following month to thoroughly restructure them. It was able to roll over CNY18.3 billion (USD2.5 billion) of onshore debt in January.

Sino-Ocean had amassed debts of CNY96.1 billion as of the end of last year, with CNY69.8 billion due this year and CNY11 billion in the next two years. The company’s liabilities were CNY8.5 billion (USD1.1 billion) more than its assets, and it had just CNY2 billion of cash and cash equivalents.

Editor: Futura Costaglione