Hong Kong Court delivers some good news to China Fishery

By PC Lee

January 6, 2016 

China Fishery is getting a brief respite as Hong Kong court yesterday ordered to discontinue the appointment of provisional liquidators for the Singapore-listed fishing company.

This come after parent group Pacific Andes entered into a deed of undertaking with China Fishery's majority club loan lenders to continue the sale of China Fishery's Peruvian business.

The move will allow for alternative solutions, such as a sale of China Fishery's assets, which could enhance recovery values versus a liquidation, says Mervyn Teo, analyst at Lucror Analytics.

According to Pacific Andes' earlier statement, two potential buyers are interested in buying Peruvian business at an indicative bid of US$1.7 billion ($2.4 billion).

HSBC, one of China's Fishery's club loan lenders, successfully applied for provisional liquidators in November 25 and is seeking to wind-up the company after China Fishery has failed to repay a US$31 million principal instalment on its US$650 million club loan facility.

The latest development is credit positive as the bid for China Fishery's Peru business is significantly higher than the company's US$870 million debt outstanding, Teo says.

He maintains "speculative buy" recommendation on China's Fishery's bonds due 2019.