China’s debt-laden Tsinghua Unigroup said on Wednesday that creditors had backed a draft restructuring proposal for the chip conglomerate after local media reported that a strategic investment of 60 billion yuan ($9.42 billion) was on the way.
Creditors representing more than 90% of outstanding claims voted in favour of the draft restructuring proposal at an investors’ meeting on Wednesday, Unigroup said in a statement.
Unigroup’s two shareholders, Tsinghua Holdings – owned by China’s prestigious Tsinghua University – and Beijing Jiankun Investment Group also voted for the plan, it added, without providing details of the proposed restructuring.
Zhilu Capital, Jianguang Assets, Great Wall Assets, Hubei Science and Technology Investment, Zhuhai Huafa and Hebei Industrial Investment formed a consortium and invested 60 billion yuan to take over the company’s entire equity, Securities Times reported.
The 21st Century Business Herald reported earlier on Wednesday that the 60 billion yuan would be in place by the end of March.
Earlier this month, Unigroup said a consortium led by Beijing Jianguang Asset Management, also known as JAC Capital, and Wise Road Capital would become a strategic investor.
Unigroup, under former real estate magnate Zhao Weiguo, made aggressive investments in various chip companies but these bets were mostly unsuccessful and caused the company to cross-default on bonds worth about $3.6 billion by end-2020.
Administrators will now submit the draft restructuring proposal to Beijing No. 1 Intermediate People’s Court for approval in accordance with Chinese bankruptcy laws, Unigroup said on its website.
- Reuters with additional editing by George Russell
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