FerroChina bankruptcy restructuring deal reached

Creditors of bankrupted galvanized-steel maker FerroChina have reached a restructuring agreement under which China Minmetals will buy five subsidiaries for US$468.5 million, the Wall Street Journal reported. Under the deal, which one observer called a "reasonable outcome," some foreign creditors recoup as much as 60% of their debts, while others, such as foreign holders of FerroChina’s outstanding bonds, will receive nothing. The deal is pending approval from a Chinese court in what is seen as a test of China’s 2007 bankruptcy law. Creditors of the Chinese steel company include Citigroup, Credit Suisse Group, CLSA Capital Partners and Citadel Investment Group, a hedge fund.