HSBC launches wind-up petition against debt-laden Sinocan
Can-maker Sinocan Holdings has been hit by a legal bid to liquidate it, launched by creditor Hongkong and Shanghai Banking Corp.
Listed Sinocan - saddled with cash-flow problems - faces a compulsory winding-up after a petition was filed in the High Court by HSBC.
It is the second move against a troubled company in recent days by HSBC, which as Hong Kong's biggest bank, is the main creditor to a large number of recession-hit companies undergoing debt restructuring.
Last Friday, the bank warned struggling Siu-Fung Ceramics it would file a petition to put the company and subsidiaries into liquidation if a revised restructuring proposal was not accepted by creditors.
In last year's last quarter, Sinocan was feeling the squeeze of $600 million in debts it said it would have to restructure.
Negotiations were to be held with creditor banks, among whom the principal parties were HSBC, American Express Bank, Banque Nationale de Paris and Belgian Bank, according to the company's 1997 annual report.
Sinocan manufactures tin cans in the mainland and blamed a downturn in market conditions for recent difficulties.
Towards the end of last year, Sinocan enlisted KPMG Peat Marwick to review its financial and trading position and draw up options for restructuring its debt.
In the six months to June 30 the company suffered an attributable loss of $137.3 million compared with a profit of $108.08 million in the previous corresponding period.
