China Sino-Ocean's offshore debt revamp plan gets 30% creditor support, sources say

By Xie Yu and Clare Jim

HONG KONG (Reuters) - A $5.64 billion offshore debt restructuring plan by China state-backed property developer Sino-Ocean Group's has only got support from less than 30% of creditors, two sources with direct knowledge of the matter said on Wednesday.

The company is facing a liquidation hearing next month, and the low support rate could give it more manoeuvring room with bondholders who still hope to recoup some of their money as China's deep property market slump drags on.

Sino-Ocean has received a winding-up petition filed by Bank of New York Mellon, a bond trustee of the key bondholder group, in a Hong Kong court. The first hearing will be Sept. 11.

The majority of creditors who agreed to the restructuring proposal were banks, while less than 20% of overall bondholders, who together hold around $4 billion worth of notes, intended to support the plan, the sources said.

Beijing-based developer Ocean did not immediately respond to comment.

Sino-Ocean last month said it planned to repay the existing debt with new loans and notes worth $2.2 billion, convertible bonds or interest-bearing perpetual securities.

Creditors of Sino-Ocean are grouped into four classes, with Class A comprising around $1.9 billion worth of outstanding syndicated and bilateral lenders, and the rest senior noteholders. Each class will be allocated different ratios of new debt.

The noteholders have pushed against back the proposal, saying it is not fair to them, sources have told Reuters.

The ad hoc bondholder group made a counter proposal early this week to suggest more new equity issuance, options for lower "haircuts" and shorter tenors, as well as stronger credit enhancement, one of the people said.

(Reporting by Xie Yu and Clare Jim; Editing by Kim Coghill)