Titan readies new proposal to restructure its debt
Executive director of the fuel-trading and logistics firm, which has lost key assets, keeps silent on the 'hair cut' for creditors under the offer
Debt-laden Titan Petrochemicals Group, controlled by partially state-owned fuel and metals trader Guangdong Zhenrong Energy, plans to present a new debt restructuring proposal to creditors to whom it owes more than US$400 million.
Titan executive director Patrick Wong Siu-hung said the board believed the debt restructuring plan would be "final", but he would not divulge the proposed "hair cut" - or the repayment discount it proposed on amounts owed.
The plan comes after Guangdong Zhenrong completed several deals in recent months to take control of Titan's most valuable assets.
This means Titan is left with few assets of any value, and if the creditors do not agree to a debt restructuring, liquidation may ensue unless another white knight is found. This could leave shareholders with nothing and creditors with 5 to 10 per cent of the amounts owed, Wong said.
"A new debt restructuring proposal will be made in early November," he said. "We have been communicating with the creditors and the proposal will aim for a solution that will take care of the interests of all stakeholders."
Titan, a fuel-trading and logistics firm, was founded in 2002 by Fujian businessman Tsoi Tin-chun. Funded by US$400 million of high-yield bonds in 2005 and a subsequent equity investment from US private equity fund Warburg Pincus, it expanded aggressively by buying tankers and building multiple fuel storage tank farms and a shipyard.