China Fishery files for bankruptcy protection in US

Pacific Andes Group, together with China Fishery, said the voluntary court filings mark a new initiative in restructuring efforts, which will expand the range of options available for resolving the companies' debt issues.
Pacific Andes Group, together with China Fishery, said the voluntary court filings mark a new initiative in restructuring efforts, which will expand the range of options available for resolving the companies' debt issues.ST FILE PHOTO

Move aimed at protecting business from possible hostile action from creditors: Report

Singapore-listed China Fishery Group filed for Chapter 11 bankruptcy protection in New York on Thursday, along with more than 15 affiliates, the Wall Street Journal reported.

The beleaguered firm's Hong Kong parent, Pacific Andes International Holdings, has filed for bankruptcy as well, said the report.

Four other affiliates, including Pacific Andes Resources Development, which is also listed on the mainboard here, filed for Chapter 15, the part of the bankruptcy code covering international insolvencies.

The Wall Street Journal said the bankruptcy filing is intended to protect China Fishery's business from the possibility of "hostile and aggressive action" from certain creditors and to prevent a forced sale of its assets at fire-sale prices, according to court papers.

By filing for bankruptcy in New York, China Fishery is allowed the benefits of the United States bankruptcy law, which would prevent the company's bondholders and creditors from seizing its assets until court proceedings take place at a later date.

China Fishery, which has operations in Peru, Russia and Africa, has been struggling with high debt levels, particularly after a hostile takeover of Peruvian fishery Copeinca and political troubles in Russia.

In November last year, HSBC filed for a winding-up petition against China Fishery and a related firm China Fisheries International, placing them in provisional liquidation. But the provisional liquidators were discharged later in February.

Shares of China Fishery and Pacific Andes Resources have been suspended from trading since November last year.

Both companies are also facing a probe by the Monetary Authority of Singapore and the Commercial Affairs Department over a possible breach of the securities law, while Pacific Andes International is facing an investigation by the Hong Kong securities regulator.

Separately, Pacific Andes Group, together with China Fishery, said yesterday that the voluntary court filings mark a new initiative in restructuring efforts - a "self-rehabilitation process" which will expand the range of options available for resolving the companies' debt issues.

"It has always been our objective to provide the best possible outcome for our creditors," said group managing director Jessie Ng, citing the group's efforts over the last six months. These include the appointing of chief restructuring officers and the attempts to sell China Fishery's Peruvian fishmeal and fish oil business.

Ms Ng added that the new initiative will allow the group to rehabilitate the businesses in transparent processes "without the threat of a forced liquidation by any one of our creditors, which would destroy value for all".

"It is in all stakeholders' interests to avoid a repetition of the highly destructive impact we witnessed in November 2015, when provisional liquidators were suddenly and forcefully imposed on China Fishery."

The group said it will not be taking further immediate steps for the sale of China Fishery's Peruvian fishmeal business as all available restructuring options are being evaluated.

A version of this article appeared in the print edition of The Straits Times on July 02, 2016, with the headline 'China Fishery files for bankruptcy protection in US'. Print Edition | Subscribe