LOGAN Group bought more time to push through its debt restructuring plan, after a Hong Kong court batted down creditor petitions to liquidate the Chinese developer’s two key units.

A group of bondholders that initially filed the wind-up petitions planned to withdraw its case after being satisfied with Logan’s restructuring proposals. They were “reasonably happy with the situation”, and no other creditors stepped in to substitute the original petitioner, judge Anthony Chan of Hong Kong’s High Court said at a hearing on Friday (Feb 16).

The development offers Shenzhen-headquartered Logan fresh breathing room after its restructuring efforts hit a snag last month, as bank creditors split with bondholders and threatened to dissolve the units with their own petition.

Once the nation’s 20th-biggest builder by sales, Logan was on an expanding list of distressed peers facing legal battles in Hong Kong – a trading hub of their US dollar debt – that were launched by creditors frustrated with a lack of progress on debt overhaul plans.

Logan’s shares jumped as much as 12.5 per cent following the dismissal.

The developer aims to sign support agreements with all creditor groups for its US$8 billion offshore debt overhaul plan by the end of April, according to a representative of Logan’s financial advisers last month.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

“I hope this is an auspicious start of our Year of the Dragon,” Chan said. “Hopefully all the cases could be as smooth as this one.”

Citicorp International, a trustee of some Logan US dollar bonds, filed the winding-up petitions in 2022 against the two Logan subsidiaries on behalf of the bondholders.

The subsidiaries jointly own Shenzhen Logan Holdings, which runs Logan’s onshore operations, according to the builder’s latest annual bond filing. They are also the guarantors of some of Logan’s US dollar bonds, Bloomberg-compiled data show.

The bondholder group had signed off on the restructuring plan after Logan disclosed four options to pay holders of existing offshore notes – including US$15 cash for every US$100 of bond principal with accrued interest waived.

Bondholders’ recovery rates would roughly range between 15 cents to 38 cents on the US dollar, depending on the chosen option, according to company estimates. Logan had about 226.5 billion yuan (S$42.4 billion) of total liabilities, including loans, bonds and other borrowings, as at the end of 2022, according to its latest annual report. BLOOMBERG