Volatility has returned to markets and it is timely to review options for dealing with distressed debt raised by PRC businesses through an offshore structure. PRC debt (including offshore debt) stands at record levels.
Any inability to effect a voluntary refinancing of the PRC offshore debt due to mature in the coming years is likely to result in increased restructuring activity, particularly if credit conditions tighten and/or Chinese regulatory consents to refinance on a long-term basis are not forthcoming. We have produced the attached high-level flow diagram and commentary regarding the key options (including international processes and techniques) that may be used to implement a restructuring of such offshore debt or an enforcement of any associated security and/or guarantees.
Please let us know if you have any questions on the attached diagram or if you would like us to provide you with any further information.