Creditors to seize, sell FerroChina assets

A group of foreign creditors of the mainland steel firm FerroChina – which include Citigroup, Credit Suisse and CLSA Capital Partners – are planning to size and sell the company’s assets to recoup some of the US$1 billion it owes them, Bloomberg reported. The creditors hired UK law firm Clifford Chance to help them recover US$130 million in bonds due in 2011 and US$160 million in loans. FerroChina, which is listed in Singapore, said in early October that it had suspended production and could not pay US$104 million in loans due to the financial crisis, and that another US$662 million of domestic debt was at risk. Investors in mainland companies that go bankrupt can expect to receive 36 cents on the dollar on average, less than half the amount in Hong Kong or the US. FerroChina said last week that six of its subsidiaries face 169 lawsuits by creditors and suppliers.