A creditor of Jiangsu Delong Nickel Industry Co., one of the world’s largest stainless steel producers, has told a Chinese court the business controlled by legendary businessman Dai Guofang and his family needs to be restructured.
A local court in Xiangshui County, Jiangsu province, is studying the application from the local state-owned builder, along with another three cases targeting the company’s affiliates, it said in a statement dated Wednesday. The court will decide whether to accept and hear them, which involve a large number of creditors and complicated legal relationships, it said.
Jiangsu Delong is fighting to remain liquid amid China’s property-sector crisis and a supply glut that’s heavily impacted the metals industry. Dai’s plants in China and Indonesia are able to produce more than 10 million tons of stainless steel and other metal products a year, and their demise would send ripples through China’s vast manufacturing sector and the embattled global nickel market.
The cases are also being closely watched by hundreds of wholesalers, equipment suppliers and commodity traders in and outside of China, due to Dai’s huge business network. Jiangsu Delong is one of the nation’s most prominent private steel producers and a bitter rival of Tsingshan Holding Group Co., owned by nickel tycoon Xiang Guangda.
The creditors filed for “bankruptcy restructuring” of the four companies including Jiangsu Delong, which means they were seeking to avoid liquidation of the firms and let its factories operate normally. The Xiangshui court is recruiting a judicial manager to run the process, the statement said.
The court didn’t publish the applications or disclose the details of the claims but said the judicial manager candidate must have handled a bankruptcy case with a claim of more than 5 billion yuan ($690 million) and involving more than 2,000 employees.
The candidate will also need experience in mergers and acquisitions, and be familiar with the practices on collecting overseas assets of bankrupt companies, the statement said.
