UPDATE 1: Powerlong Real Estate Confirms Appointment of CICC as New Sole FA

Wed Apr 23, 2025 07:07 AM ET: Hong Kong-listed Chinese developer Powerlong Real Estate Holdings Ltd. announced to the Hong Kong stock exchange this afternoon, April 23, that it has appointed China International Capital Corporation Hong Kong Securities Ltd., as the new sole financial advisor, confirming Octus’ prior story.

As Octus reported this afternoon, Powerlong is hiring CICC as its restructuring financial advisor to replace Alvarez & Marsal Corporate Finance Ltd. A&M itself was only hired in February – announced on Feb. 28 – to re-negotiate its offshore restructuring scheme of arrangement already sanctioned by the Hong Kong court in December. The scheme lapsed after restructuring effective date did not occur by the Feb. 28 longstop date. Haitong was financial advisor for the lapsed scheme.

After the scheme expired, three holders of Powerlong’s dollar bonds on March 5 filed to wind up Hong Kong-listed Powerlong Commercial Management Holdings Ltd.’s BVI holding company in the BVI court.

In today’s announcement, Powerlong said its new financial advisor CICC and legal advisor Sidley Austin will work with the company’s creditors to explore all feasible options to further pursue a holistic solution to the current liquidity issues with a view to reaching an agreement with the offshore creditors as soon as possible.

Powerlong Hiring CICC as FA to Replace A&M; BVI Liquidation Hearing Scheduled for May 12

Chinese developer Powerlong Real Estate Holdings is in the process of hiring China International Capital Corporation as its financial advisor to replace Alvarez & Marsal, according to two sources briefed on the matter.

CICC is going through its internal process for approval, one of the sources said, without mentioning whether it has signed an engagement letter.

The Fujian-based developer engaged A&M in late February to re-negotiate an offshore scheme of arrangement restructuring deal sanctioned by the Hong Kong court on Dec. 17, 2024.

However, that renegotiation effort became tenuous after the court on Feb. 21 rejected Powerlong’s request to extend by three months the Feb. 28 scheme longstop date, paving the way for creditors to file a winding up one-week after that deal lapsed.

On Feb. 28, Powerlong officially announced the appointment of A&M and that its offshore restructuring effective date did not occur by the Feb. 28 longstop date, causing the scheme to lapse.

Three holders of Powerlong’s defaulted $500 million, 6.25% senior notes due Aug. 10, 2024 filed a liquidation application on March 7 against the BVI holding company of Powerlong’s Hong Kong-listed commercial property management arm Powerlong Real Estate (BVI) Holdings Ltd. in the BVI court, and proposed FTI Consulting as joint and several liquidators.

In an announcement about the application, Powerlong said that the three holders are funds managed by Hong Kong-based Oasis Management Co. Ltd., AM Squared and PAG.

The announcement added, “The company is actively communicating with the Applicants in an effort to negotiate an effective solution .. [and] will seek legal measures to firmly oppose the Liquidation Application and take all necessary actions to safeguard the company’s legal rights.”.

The hearing of the liquidation application has been changed to May 12 from April 28, according to BVI court records.

Octus reported on March 12 that the bondholder ad hoc group, or AHG, which is advised by Latham & Watkins, has been preparing to file a Hong Kong winding-up petition against the Hong Kong-listed Powerlong Real Estate Holdings.

The AHG – at least as of late February – holds about 40% of Powerlong’s $2.25 billion offshore bonds, accounting for around 31% of its total $2.8 billion in-scope debt in the previous scheme, as Octus reported.

The company’s legal counsel is Sidley Austin. Haitong International Securities was the company financial advisor for the original scheme deal.

Powerlong and CICC did not respond to requests for comment.