China SCE Group Holdings Limited has outlined a multi-pronged offshore debt restructuring that will see up to US$2.27 billion of liabilities exchanged for a mix of equity and new notes, subject to creditor and shareholder approvals.
Key restructuring framework • In-scope debt: US$2.27 billion, comprising four USD senior notes (US$1.80 billion) and two syndicated loans (about HK$571.3 million and US$397.4 million). • Creditor support: Approximately 78% of outstanding principal has signed the Restructuring Support Agreement (RSA). • Implementation: A Hong Kong scheme of arrangement targeted to become effective by 31 July 2026 (extendable to 31 October 2026).
Restructuring consideration – three options Creditors may choose one or a mix of: 1) Option 1 – 2.5% cash/short-term notes (27.5% of claim) with 70% haircut. 2) Option 2 – 41.25% in mandatory convertible bonds (MCB), 13.75% in new shares, 35% in medium-term notes, 10% forfeited. 3) Option 3 – new long-term notes (subject to cap). Non-responding creditors default to Option 2.
Planned securities issuance under Option 2 Mandatory Convertible Bonds (MCB) • Principal: up to US$1.05 billion (41.25% of maximum scheme claims). • Tenor: 18 months, zero-coupon. • Mandatory conversion: one-third of principal at 6, 12 and 18 months; voluntary conversion allowed up to 20 business days before maturity. • Initial conversion price: HK$1.60 per share—1,368% above the HK$0.109 close on 26 June 2025 and 2,440% above the HK$0.063 close on 13 April 2026. • Potential dilution: up to 5.09 billion new shares (120.5% of current issued capital). • Listing: application to SGX for the bonds and to Hong Kong Stock Exchange (HKEX) for the conversion shares.
New Share Issue • Up to 1.70 billion shares at HK$1.60 each (HK$2.71 billion/US$349.25 million), representing 40.2% of existing share capital. • Combined with full MCB conversion, total shares in issue could rise from 4.22 billion to 11.01 billion. Founder and chairman Wong Chiu Yeung’s stake would dilute from 50.2% to 19.3%.
Capital base To accommodate the enlarged equity, the board proposes increasing authorised share capital from 10.00 billion to 12.00 billion shares.
Financial backdrop For FY 2025 the group reported: • Net loss attributable to shareholders: RMB7.45 billion. • Net current liabilities: RMB19.93 billion. • Interest-bearing debt: RMB33.09 billion versus cash of RMB2.34 billion. • Offshore defaults since October 2023 totalled RMB20.26 billion principal and RMB3.63 billion accrued interest.
Next steps An extraordinary general meeting will be convened by 13 May 2026 to seek shareholder approvals for: • Issuance of MCB and related conversion shares under a specific mandate. • Issuance of new shares under a specific mandate. • Increase in authorised share capital.
Completion remains subject to court sanction of the scheme, regulatory consents and other conditions. The company cautions that the transactions may not proceed and advises investors to exercise caution when dealing in its securities.