Fushun Special Steel May Change Ownership
The debt-ridden Northeast Special Steel finally saw a glimmer of dawn. According to Fushun Special Steel’s announcement today, Dalian Intermediate People’s Court ruled on the 10th to formally accept creditors’ applications against Northeast Special Steel (the controlling shareholder of Fushun Special Steel) and its subsidiaries, Dalian Special Steel Co., Ltd. and Dalian High Alloy Bar Co., Ltd. Reorganize.
Since Dongbei Special Steel reported on March 28 this year that it failed to pay the principal and interest of the “15 Dong Special Steel CP001” bond, it has so far experienced nine bond defaults, with an amount exceeding 5 billion yuan, which has become this round of “deleveraging”. “The first steel company to enter the reorganization process in the process.
According to the relevant provisions of the Enterprise Bankruptcy Law, if the debtor is unable to pay off the due debts, the creditor may propose to the court to reorganize the debtor or liquidate the debtor. After the start of the reorganization process, the creditors declare their claims in accordance with the law, and the bankruptcy administrator will submit a draft of the reorganization plan within a maximum of nine months under the supervision of the court and the creditors, and the court will finally decide whether to approve the implementation.
According to this law, Northeast Special Steel will formally enter the reorganization, and the “debt-to-equity swap” plan circulated in the market before is said to have been rejected.
In comparison, reorganization is relatively beneficial to the restoration of the hematopoietic function of the enterprise, but the direct loss of creditors may be greater than the implementation of debt-to-equity swaps. But for companies such as Northeast Special Steel that have lost their hematopoietic function, reorganization should be the most ideal way.
In today’s announcement, Fushun Special Steel specifically emphasized that the scope of reorganization applied by creditors does not include listed companies (ie, “Fushun Special Steel”). According to analysis, this is mainly related to Fushun Special Steel’s military and aerospace special steel production capacity, and the company is currently a second-class confidential unit. At present, Northeast Special Steel holds 497 million shares of Fushun Special Steel, accounting for 38.22% of the total share capital, which has been frozen or waiting to be frozen.
Although Fushun Special Steel is not within the scope of the reorganization, it is still in doubt whether the actual controller of the company will change after the reorganization, because although the creditors do not apply for the reorganization of Fushun Special Steel, they do not rule out obtaining the equity of Fushun Special Steel. Due to the particularity of Fushun Special Steel, even if its actual controller changes, it is expected to maintain its state-owned status. (Source: Shanghai Securities News)