CHINASOUTHCITY (01668) has announced that it has entered into confidentiality agreements with certain major creditors and stakeholders to negotiate key terms of a comprehensive debt restructuring, with discussions ongoing. The liquidators emphasize that maintaining the company's listing status is critical for the success of the restructuring.

To resume trading, the company must address the issues leading to its suspension, comply with the resumption conditions, and fully adhere to listing rules until the Hong Kong Stock Exchange (HKEX) is satisfied. If trading is not restored within 18 months from the suspension date—by February 10, 2027—the HKEX may delist the company's shares.

Given the tight deadline, the liquidators must promptly assess whether sufficient creditor and stakeholder support exists to proceed with the restructuring. The proposed restructuring timeline is subject to several factors, including: (a) The need to file a scheme of arrangement under Section 670 of the Companies Ordinance (Chapter 622) to implement the restructuring. (b) An estimated six to nine months for preparing, launching, and completing the scheme. (c) The liquidators' evaluation of creditor and stakeholder backing before committing limited resources to the process.

For the restructuring to proceed, the scheme must secure approval from at least 75% in value of creditors in each affected class, as required under Section 674 of the Companies Ordinance. The liquidators warn that delisting would significantly diminish creditor and stakeholder willingness to support the restructuring, potentially rendering the plan unfeasible if not completed before the resumption deadline.

Creditors and stakeholders are encouraged to engage actively with the liquidators and submit feedback or proposals. For inquiries, contact the liquidators at ProjectCompassFTI@fticonsulting.com.