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Trading of Tsinghua Unigroup’s Bonds to be Halted amid Restructuring
July 21, 2021
The court-appointed restructuring administrator for the Tsinghua Unigroup has asked for halting trading of all existing bonds of the distressed chipmaker as the restructuring progresses as reported by Bloomberg. The creditors to the group, backed by Tsinghua University, need to file debt claims to the administrator by October 8. The group was forced into restructuring under the Chinese bankruptcy law after it defaulted on its onshore as well as offshore bonds over the last two years as its debt surged to CNY 172bn ($26.5bn) at the end of 2019 due to its aggressive acquisitions in the capital intensive chip sector. A team nominated by its parent Tsinghua Holdings Co will be luring strategic investors as a part of the restructuring according to Pacific Securities. It expects the restructuring to be smooth since Unigroup still holds valuable assets. The restructuring would include agreements with the strategic investors to source in new funds and with the creditors to trim down or delay existing payments. Investors including Alibaba and state-backed funds in East China’s Zhejiang province have shown interest in Unigroup’s 46.65% stake in Unisplendour, which holds 51% of H3C Technologies Co. Ltd. The bondholders of its offshore bonds had demanded a freeze on its offshore assets in March to prevent the sale of those assets to prioritize payments to local bondholders.
Unigroup’s 4.75% 2021s, 5.375% 2023s and 6.5% 2028s were up 0.22, 0.38 and 0.25 to trade at 44.54, 44.75 and 44.5 respectively.
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