Court extends legal action moratorium on Pac Andes

Pard owns 58 per cent of shares in China Fishery Group (above). Trading in shares of both firms has been halted since last November after they said they were being probed for a possible breach of the securities law.
Pard owns 58 per cent of shares in China Fishery Group (above). Trading in shares of both firms has been halted since last November after they said they were being probed for a possible breach of the securities law.PHOTO: CHINA FISHERY GROUP

But it can't restrain winding-up proceedings made against the frozen fish seller outside of S'pore

Creditors of cash-strapped frozen fish seller Pacific Andes Resources Development (Pard) appear to have scored a legal victory yesterday.

A Singapore court extended a moratorium on legal action launched against the firm but ruled that it cannot restrain winding-up proceedings being made against Pard outside of Singapore.

The Pacific Andes group has struggled to repay debt since its relationships with banks soured last year.

Fearing what it called "the threat of forced liquidation", Singapore Exchange-listed Pard filed for protection under the Singapore Companies Act in July.

Its creditors opposed that move, alleging that the firm was stalling to shield its units from attempts to investigate certain suspicious transactions.

The full-day chamber meeting was held at the High Court earlier this month to decide if the moratorium should be extended.

It was attended by senior counsels from Rajah &Tann representing Maybank; WongPartnership, which represented Rabobank and Standard Chartered; TSMP Law for Bank of America; and Drew & Napier and Ashurst, which acted for Pard.

Clifford Chance Asia acted for one group of Pard's bondholders, while Advocatus Law appeared on behalf of another dissenting group of bondholders.

Judicial Commissioner Kannan Ramesh decided yesterday that the moratorium for proceedings against Pard would be extended to Oct 12.

The moratorium can be extended further to Jan 13 next year if Pard agrees to hold a meeting to vote on a restructuring plan and agrees to appoint a chief restructuring officer, who will report to the court and provide independent oversight over the firm's affairs.

But the moratorium is limited to Singapore and it does not apply to three other Pard units that Pacific Andes had sought to protect, The Straits Times understands.

This is because Pacific Andes Enterprises and Parkmond Group, which trade seafood products and are incorporated in the British Virgin Islands, and Pacific Andes Food, a service provider based in Hong Kong, do not have strong enough connections to Singapore.

This leaves the door open for Pard's creditors to file for liquidation of the firm anywhere else in the world where it has assets, such as Bermuda or Hong Kong.

Pard could apply for an injunction in these jurisdictions to restrain winding-up petitions on the basis that a restructuring is ongoing in Singapore, but the outcome is uncertain, given the Singapore court's ruling.

Pacific Andes spokesman Geoffrey Walsh declined to comment yesterday.

He said an announcement would be made to the SGX "after the court delivers its reasons".

Pard owns about 58 per cent of the shares in associate firm China Fishery Group, also listed on the SGX and operating mainly in Peru.

Trading in shares of both Pard and China Fishery has been halted since November last year after they disclosed that they were being investigated for a possible breach of the securities law.

In January, Pard failed to honour coupon payments on $200 million worth of 8.5 per cent Singdollar bonds due next year.

The bonds were selling at 25 cents to a dollar yesterday, according to Bloomberg.

A version of this article appeared in the print edition of The Straits Times on September 27, 2016, with the headline 'Court extends legal action moratorium on Pac Andes'. Print Edition | Subscribe