RE TIMES CHINA HOLDINGS LTD

HCMP 53/2025 [2025] HKCFI 3937 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 53 OF 2025 ___________________ IN THE MATTER OF Times China Holdings Limited (時代中國控股有限公司) and IN THE MATTER OF Sections 670, 673 and 674 of the Companies Ordinance (Cap. 622) ___________________ Before: Hon Linda Chan J in Court Date of Hearing: 30 July 2025 Date of Order: 30 July 2025 Date of Reasons for Judgment: 28 August 2025 __________________________________ R E A S O N S F O R J U D G M E N T __________________________________ By Petition presented by Times China Holdings Limited (時代中國控股有限公司) (“Company”), the Company sought sanction of a scheme of arrangement between itself and the “Creditors” under section 673 of the Companies Ordinance (Cap. 622) (“CO”). At the hearing, I made an order sanctioning the Scheme. These are the reasons for my judgment. A. BACKGROUND The Company was incorporated in the Cayman Islands on 14 November 2007 and has since March 2008 been registered as a non-Hong Kong company. The Company’s authorised and paid up share capital is HK$1 billion and HK$210,181,600 respectively. Its shares have been listed on the Main Board of The Stock Exchange of Hong Kong (“SEHK”) since 2013 (stock code: 1233). The Company is an investment holding company with subsidiaries established or incorporated in various jurisdictions including the Mainland, the BVI and Hong Kong (together “Group”). The Company has served as the main offshore financing platform of the Group and has raised substantial funds to support the investment and business of its subsidiaries operating in the Mainland. The Group engages in the business of urban property development in residential, industrial and commercial property, urban re-development and long-term leasing and related business in the Mainland with particular focus in the Greater Bay Area. In mid-2021, the Group began to have liquidity problem and failed to pay the outstanding principal and interest fallen due under some of the offshore debts which triggered cross-defaults of the Company’s obligations under other debt instruments. Although the Group took steps to increase its revenue by accelerating the presales and sales of property, expediting the collection of sales proceeds and receivables and extending the maturity dates of some loans, the liquidity problem remained. According to the audited financial statements of the Company and the consolidated financial statements of the Group made up to 31 December 2024, the Group (but not the Company) was insolvent both on a “cashflow” and “balance sheet” basis in that: The Group had net current liabilities of RMB 8,002,091,000 and net liabilities of RMB 7,867,491,000. The Company had net current assets of RMB 2,286,355,000 and net assets/net equity of RMB 2,287,480,000. However, the bulk of the current assets (RMB 29,325,857,000 or 99.98%) were amounts due from subsidiaries, which are not recoverable until the debts owed by the subsidiaries to the secured creditors have been repaid in full. The other current assets only amounted to RMB 5,859,000, which fell far short of the amount due and payable by the Company. Since early 2023, the Company has been negotiating with an ad hoc group of beneficial holders of “Existing Notes” (as defined in §11(1) below) holding 26.77% of the outstanding principal of the “Existing Debts” (as defined in §11 below) (“AHG”) in respect of a proposed restructuring of its debts. For this purpose, the Company engaged China International Capital Corporation Ltd as its financial advisor and Messrs Sidley Austin as its legal advisors. On 15 April 2024, Hang Seng Bank Limited (“HSB”) presented a winding up petition against the Company on the ground that it had failed to pay the “Existing Loan” (as defined in §11(2) below). The petition has since been adjourned to 19 May 2025 pending determination of these proceedings. On 22 November 2024, the Company and AHG entered into a restructuring support agreement (“RSA”) which contains a term sheet setting out the material terms of the proposed restructuring (“Restructuring”). Shortly after the RSA’s execution, the Company appointed Kroll Issuer Services Limited (“Kroll”) as the Information Agent, which in turn launched a transaction portal through which the Creditors could access and accede to the RSA. Pursuant to the Convening Order dated 27 May 2025, the Scheme Meeting took place on 8 July 2025 at which 546 out of 561 Creditors in attendance, representing 97.50% in number and 92.75% in value, voted for the Scheme. B. KEY FEATURES OF SCHEME The Scheme is designed to compromise and release the Company’s offshore debts which arose out of the following debt instruments (“Existing Debts”): “Existing Notes”: 6 series of USD-denominated and New York law-governed senior notes issued by the Company between November 2017 and June 2021, with (a) outstanding principal of US$2.65 billion, (b) tenor ranging between 3-6 years and maturity dates ranging from March 2023 to January 2027, and (c) interest rates ranging from 5.55% to 6.75%. “Existing Loan”: Syndicated facilities governed by Hong Kong law with an outstanding principal of US$250.4 million and interest rate based on HIBOR/LIBOR, and default interest rate at 2% over the contractual rate. The total outstanding principal under the Existing Debts is US$2.9 billion which represents 90.9% of the total debts owed by the Company. The remaining 9.1% debts (US$289 million) not compromised by the Scheme have been or will be dealt with by the Company with the relevant creditors by separate bilateral agreements. These debts comprise: “Shareholder Loan”: This is a US$70 million loan advanced by the Chairman’s spouse to the Company which is interest free until the maturity date (31 December 2022) and, thereafter, carries default interest at 10%. “Glory Senior Notes”: These are 5% senior notes issued by the Company with outstanding principal of US$99.5 million and maturity date of 22 December 2028. “Fogang Project Shareholder Loan”: The Company is liable as a guarantor in respect of a US$119.5 million loan for a project in Fogang County and under a put option connected with the project. The Scheme Administrators will assess the “Claims” and determine the Creditors’ entitlements to the Scheme Consideration under the Scheme by reference to (1) the outstanding principal of the Existing Debts as at the “Record Time”; and (2) all accrue and unpaid and default interest and other fees and charges up to but excluding the earlier of RED or Reference Date. In exchange for the release of their Claims, the Creditors will receive Scheme Consideration in one or a combination of 3 Options, each of which is subject to a cap. Once an Option is oversubscribed, the excess will first be reallocated to Options 1, 2 and 3 in that order, until the maximum acceptance amount of that Option is met: Option 1: (a) Upfront Cash Consideration, (b) Short Term Notes, (c) the New Shares Consideration, and (d) MCBs II. Option 2: (a) MCBs I, (b) Medium Term Notes, and (c) MCBs II. Option 3: (a) Long Term Notes and (b) MCBs II. The components of the Scheme Consideration are: “Upfront Cash Consideration” being US$10 million in cash. “New Shares Consideration” being 481,306,279 new shares to be issued by the Company. “Short Term Notes” with total principal of US$190 million and a tenor of 3.5 years from the earlier of (a) Restructuring Effective Date (“RED”) or (b) the Reference Date, with interest at 4.0% per annum. “Medium Term Notes” with total principal of US$825 million and a tenor of 7 years from the earlier of RED or the Reference Date, with interest at 4.2% per annum. “Long Term Notes” with total principal of US$400 million and a tenor of 8 years from the earlier of RED or the Reference Date (with an option for the Company to further extend its maturity date for up to 2 years), with interest at 4.5% per annum. “MCBs I” with total principal of US$1,008 million, which will be converted into shares to be issued by the Company in 1.5 years from the earlier of RED or the Reference Date. “MCBs II” with total principal of US$310 million, which will be converted into shares to be issued by the Company in 1.5 years from the earlier of RED or the Reference Date. Upon issuance of the New Shares Consideration and the conversion of the MCBs, the Chairman’s shareholding in the Company will be diluted from 59.2% to 30.1%. B1. Consent Fee, Work Fees & Advisors Fees As an incentive to the Creditors to support the Restructuring at an early stage, the Company agreed to pay a “Consent Fee” at (1) 0.125% of their Claims if they accede to the RSA by the “Early Consent Fee Deadline” (20 December 2024) or (2) 0.05% if they accede to the RSA by the “Base Consent Fee Deadline” (20 January 2025). Creditors holding 82.61% and 3.06% of the Claims have acceded to the RSA by the Early Consent Fee Deadline and the Base Consent Fee Deadline respectively. The Company also agreed to pay US$9,702,825 in cash (“AHG Work Fee”) as compensation for the time and effort spent by AHG in negotiating with the Company on the Restructuring in the past 2 years and their inability to trade their Existing Notes. 60% of AHG Work Fee is payable on RED and 40% within 6 months after RED. AHG Work Fee represents 1.25% and 0.33% of the Existing Debts as at 31 December 2024 held by AHG and the Creditors respectively. In addition, the Company agreed to pay US$3.7 million (“AHG Advisor Fee”) as reimbursement of the costs incurred by AHG in retaining financial and legal advisors to assist their negotiations and work. AHG Advisor Fee represents 0.48% and 0.13% of the Existing Debts as at 31 December 2024 held by AHG and the Creditors respectively. The costs and expenses incurred by the Company in preparing and implementing the Restructuring and the Scheme are estimated at US$10.4 million. B2. Third party releases Upon the terms of the Scheme become effective on RED, the following third party liabilities will be released through Deeds of Release executed by the Company on behalf of the Creditors: “Existing Subsidiary Obligors” which have provided security for the Existing Debts. These releases are necessary to avoid contributory claims being brought by these third parties against the Company that may undermine the Scheme (Re Golden Wheel Tiandi Holdings Co Ltd [2025] HKCFI 3268, §§20(1) & (2)). Directors, professional advisers and administrative parties, which is limited to the liabilities arising from the preparation, negotiation, sanction or implementation of the Scheme and the Restructuring. There is no general release for directors, officers or advisers in respect of any other liabilities. The release is justified as it is not clear if the Directors and Officers’ liability insurance covers any liability incurred in relation to the Restructuring/Scheme. Under Cayman law (which is the law governing its internal affairs), directors/officers may seek indemnity for liability against the Company. A release of such liability would avoid ricochet claims against the Company (Re Kaisa Group Holdings Ltd [2025] HKCFI 2699, §19(3)). The terms of the releases are expressly stated to exclude (1) any claims arising out of the New Finance Documents; (2) fraud, wilful default, gross negligence, or wilful misconduct by a Released Person; (3) a failure by any Released Person to comply with the terms of the Scheme or any Restructuring Documents; (4) any claim or liability or cause of action which does not arise directly or indirectly pursuant to, under or in connection with the Existing Debts, the Scheme or the Restructuring; and (5) the rights of any Creditors arising under any report or advice provided by an advisor . B3. Restructuring Conditions The terms of the Scheme will only take effect on RED which, in turn, requires compliance or waiver by the “Super Majority” AHG or the “Majority Consenting Creditors” of all the Restructuring Conditions before the Longstop Date (30 September 2025) . The Restructuring Conditions include: Obtaining all relevant regulatory or shareholder approvals or other consents necessary for the Restructuring to take effect including (a) registration of the New Notes and MCBs with NDRC and (b) obtain an order for recognition of the Scheme under Chapter 15 of US Bankruptcy Code (“Chapter 15 Order”). Appointment of Monitoring Agent on terms reasonably acceptable to Majority AHG. Confirmation by Majority AHG that all the Restructuring Documents are in Agreed Form. Execution of the Shareholder Loan Amendment Agreement to amend the terms of the Shareholder Loan. Satisfaction of the conditions precedent contained in the New Security Documents unless waived by the relevant party. Payment of fees in the total sum of US$28.3 million being (a) all the fees, costs and expenses of the Information Agent, the Holding Period Trustee, the Existing Notes Trustee, the Common Depository, New Trustee, the Chairperson and Scheme Administrators (US$9.1 million), (b) 60% of AHG Work Fee (US$5.8 million), (c) fees and expenses of the Existing Facility Agent agreed at US$530,000 of which US$380,000 has not been paid, (d) Consent Fee (US$3 million), (e) Upfront Cash Consideration (US$10 million). B4. Modification clause The Scheme contains clauses which permit inter alia (1) modifications of its terms with the consent of the “Majority Scheme Creditors” (representing 50% in value of the Claims held by all Creditors voting at the relevant time) and approval of the court provided that the modification would not have any material adverse effect on the interests of the Creditors; and (2) extension of the Longstop Date with prior written consent of the “Majority Scheme Creditors”. B5. Issues raised at convening hearings and amendments thereof At the 1st and 2nd convening hearings held on 11 April 2025 and 27 May 2025 respectively, this Court raised a number of issues or concerns on the draft Scheme Document most of which have been addressed by the Company before the sanction hearing. The substantive amendments made to the Scheme Document are: To add a new Restructuring Condition that the terms of the Shareholder Loan will be amended to remove the Company’s liability to pay default interest from 1 January 2023, to address the court’s concern as to the accrual of default interest on the Shareholder Loan (which will not be compromised under the Scheme). To simplify the explanations on the Scheme Consideration with examples to illustrate what the Creditors will get under different Options in place of the previous explanations which focused on the allocation mechanism as opposed to what the Creditors will get under various Options. To correct the statement that the Chairman will “provide a substantial portion of its [sic] shareholding in the Company as a part of the Scheme Consideration” and replace it with a statement that the Chairman’s shareholding will be diluted following the issue of the New Shares Consideration. To explain why Glory Senior Notes were excluded from the Scheme, essentially because they benefit from a security enhancement package comprising guarantees and share pledges which are substantially different from the securities for the Existing Debts. To remove delivery of RED Notice by the Company as one of the Restructuring Conditions so that the Company cannot unilaterally prevent RED from occurring. To include payment of the reasonable fees and costs of Existing Facility Agent (under the Existing Loan) in respect of the Restructuring as a Restructuring Condition to ensure parity in treatment with the Existing Notes Trustee. To define AHG with more clarity and certainty. This is necessary given that under the Scheme, AHG has various rights which may be exercised by a “Majority” or “Super Majority” of them. The original definition did not inform the readers which Creditors were included in AHG. The definition has since been amended by defining AHG as the “Initial Participating Creditors” as defined in the RSA with particulars set out in Schedule 1 thereto. At the sanction hearing, the Company handed up a copy of the RSA showing the names of 12 Creditors which comprise AHG. There are 2 matters which the Company has not amended by the time of the sanction hearing. First, the extension of Longstop Date with prior written consent of Majority Scheme Creditors (see §25(2) above). For the reasons explained in Re Shimao Group Holdings Ltd [2025] HKCFI 1751, §49, I consider that the Company should only be allowed to extend the Longstop Date with the consent of the same statutory majority in value (75%) of the Claims for approval of a scheme. The Company (through leading counsel) undertakes to amend the definition of “Majority Scheme Creditors” by changing to a 75% in value of the Claims present and voting. Second, the inclusion of the need to obtain a Chapter 15 Order as one of the Restructuring Conditions (see §24(1) above). The need to obtain a Chapter 15 Order was included at the time when the Company did not know the extent of participation of the Creditors under the Existing Notes (which are governed by New York law) at the Scheme Meeting. The Company considers that the risk of enforcement action taken by dissenting Creditors under the Existing Notes is minimal given (a) the very high level of participation of the Creditors under the Existing Notes (over 93.91% in value voted at Scheme Meeting) and (b) the fact that the Company does not have any assets in the US. In any event, it seems to me that the Longstop Date is only 2 months away from the sanction hearing, it would be impossible for the Company to obtain a Chapter 15 Order before the Longstop Date. Ms Sara Tong SC (leading Mr Danny Tang) states that the Company intends to obtain AHG’s agreement to waive this Restructuring Condition given that under clause 7.2 of the Scheme, the “Super Majority” of AHG may waive such Condition. I do not think it is right or appropriate to leave such an important matter in the hands of some (but not all) Creditors. Nor do I think it should be left in an uncertain manner. It would not be in the interests of the Creditors as to whole to delay compliance with the Restructuring Conditions which, in turn, would delay their entitlement to receive the Scheme Consideration under the Scheme. Accordingly, sanction of the Scheme is subject to the Company amending the terms of the Scheme by (1) changing the definition of “Majority Scheme Creditors” to Creditors holding 75% in value of the Claims; and (2) removing the need to obtain a Chapter 15 Order. C. DISCUSSION In considering whether to sanction a scheme, the court considers the following issues: whether the scheme is for a permissible purpose; whether creditors who were called on to vote as a single class had sufficiently similar legal rights that they could consult together with a view to their common interest at a single meeting; whether the meeting was duly convened in accordance with the court’s directions; whether creditors have been given sufficient information about the scheme to enable them to make an informed decision whether or not to support it; whether the necessary statutory majorities have been obtained; whether the court is satisfied in the exercise of its discretion that an intelligent and honest man acting in accordance with his interests as a member of the class within which he voted might reasonably approve the scheme; and if the company which puts forward the scheme is a foreign company, whether there is sufficient connection between the scheme and Hong Kong, and the utility of the court sanctioning the scheme. C1. Permissible purpose, compliance with directions & statutory majorities The purpose of the Scheme is to compromise the Existing Debts so as to restore the solvency of the Company, which is a permissible purpose. The directions given at the 2nd convening hearing have been complied with. Notice of Scheme Meeting was sent to the Creditors no less than 21 days before the Scheme Meeting by publication on the Transaction Portal, announcement on SEHK news, emails and distribution to beneficial holders of Existing Notes through the Clearing Systems in accordance with the Convening Order. The high percentage of votes cast at the Scheme Meeting (92.53% in value of the Claims) shows that the distribution of the Notice and Scheme Document have been effective. The Scheme was approved by 97.5% in number and 92.75% in value of the Creditors present and voting at the Scheme Meeting held on 8 July 2025. C2. Class composition The question is whether the rights (as opposed to their commercial or other interests) of the Creditors before and after the Scheme are so dissimilar that they cannot form a single class. The court would adopt a broad approach and avoid giving unjustified veto rights to minority creditors (Re Kaisa, §34). In the present case, the Creditors holding the Existing Notes and the Existing Loan can constitute one class for the following reasons. First, the rights of the Creditors are materially the same in that they are all unsecured creditors against the Company and they benefit from the same security package provided by the Existing Subsidiary Obligors. Although the Existing Notes and Existing Loan have different interest rates and maturity dates, these differences do not fracture the class as all outstanding principal and interest accrued up to the Record Time form part of the Claims (Re Powerlong Real Estate Holdings Ltd [2025] HKCFI 271, §§27(1)-(3)). Second, the rights of the Creditors under the Scheme are the same. They are entitled to receive Scheme Consideration in proportion to their Claims. As regards AHG Work Fee, the relevant principles have been stated in Re Kaisa, §41; Re Golden Wheel, §38 and may be summarized as follows: Generally, where the payment of a work fee by the company to some creditors independently of the scheme, it would not give rise to a class issue. However, if the work fee is dependent on the scheme taking effect, the court will need to form a view about the materiality of the fee when assessing whether the rights of the creditors who will not be paid the fees are “sufficiently dissimilar that they cannot consult together”. If the fees are immaterial to their decision, then they can consult together. In considering the materiality of the work fee, the relevant comparator is the returns under the scheme and in liquidation, rather than the debts to be compromised under the scheme or the debts owed to the creditors. In the present case, I do not think that AHG Work Fee would fracture the class for these reasons: It represents the compensation agreed to be paid by the Company for (a) the time and effort spent by AHG in negotiating with the Company followed by participating in the formulation of the terms of the RSA, the Restructuring and the Scheme; and (b) not being able to trade the Existing Notes for over 2 years as a result of receiving price sensitive and non-public information regarding the Company (Re Kaisa, §43(2)). It represents additional recovery by AHG under the Scheme of 1% to 1.1% if RED takes place on 30 September 2025. This amount is not material as compared to the recovery rate of 15.6% to 42.7% under the Scheme. As regards AHG Advisor Fee, it represents reimbursement of the actual expenses incurred by AHG in preparing and reviewing the Restructuring documents, and does not amount to additional benefit to AHG (Re Sino-Ocean Land (Hong Kong) Ltd [2025] HKCFI 1270, §35). In any event, there is no inequality in treatment between the Creditors as the holder of the Existing Loan is also entitled to receive the Facility Agent Fee. The relatively lower amount (US$530,000) reflects the fact that the Facility Agent Fee was involved at a much later stage. As for the Consent Fee (0.05% to 0.125%), it does not pose any class issue as it was offered to all the Creditors and the amount is relatively modest, as compared to the returns under the Scheme (15.6% to 42.7%) and in liquidation scenario (1.04%), such that it would not have the effect of persuading a Creditor to vote for the Scheme which it would otherwise reject (Re Powerlong, §28). C3. Sufficiency of information & discretionary factors The Company has provided sufficient information about the Restructuring and the Scheme in the Scheme Document: It contains (a) an overview of the Scheme; (b) the implementation and effect of the Scheme; (c) explanation of Scheme Consideration including its allocation under the 3 Options; (d) a summary of the New Notes and MCBs; and (e) risk factors underlying the Scheme. It discloses the material interests of the Company’s directors under the Scheme as required by s.671(3) of the CO. It contains a Liquidation Analysis prepared by PwC and a Recovery Analysis prepared by Kroll. It contains pro forma balance sheets showing the financial position of the Group and of the Company before and after implementation of the Scheme. They show that the Company’s net equity will be increased from RMB 2,287 million to RMB 16,747 million. It contains a cash flow analysis prepared by the Company which sets out the assumptions and the projected revenues and cashflow under various projects to illustrate the ability of the Group to service the repayment obligations under the New Debt Instruments after RED. According to the projection, the Group will have cash balance of RMB 849 million by the end of 2025, RMB 3,370 million by end of 2026 and RMB 1,140 million by the end of 2035. It contains tables and charts summarising the 3 Options of the Scheme Consideration with illustrative examples. The court would be slow to differ from the majorities’ view as businessmen are much better placed than the court in assessing what is commercially advantageous to them (Re Golden Wheel, §45). The Scheme is one which an intelligent and honest man would approve because: The return under the Scheme is significantly higher than the recovery rate in liquidation scenario (§40(2) above); Although AHG enjoys a higher “return” in the form of AHG Work Fee, the difference is attributed to the time and effort they spent in negotiating and formulating the Restructuring and the Scheme which ultimately benefit the Creditors as a whole. The amount and how it is to be paid were fully disclosed in the Scheme Document and overwhelming majority of Creditors still voted for the Scheme; No Creditor or observer in attendance at the Scheme Meeting asked any question or raised any objection to the Scheme Document or the terms of the Scheme. Ms Tong informs the court that the Company has not received any notice or indication from any Creditor that it intends to challenge the Scheme; Most of the Creditors are institutional investors, they are better placed to make their own judgement as to whether or not it is in their interests to approve the Scheme (Re Kaisa, §46; Re Golden Wheel, §44). The evidence before the court shows that the Company has made good progress in complying with the Restructuring Conditions and it is likely that they will be complied with before the Longstop Date: At the EGM held on 25 July 2025, the issuance and allotment of new shares for the purpose of the Scheme was approved. On 29 July 2025, SEHK has given conditional listing approval for listing and permission to deal in the new shares to be issued upon conversion of the MCBs and the New Shares Consideration. The Company has commenced the process of applying for approval in respect of the New Debts Instruments at NDRC, and will file the application once the court sanctions the Scheme. The Company expects to finalise the appointment of Madison Pacific Trust Limited as Monitoring Agent shortly. AHG already confirmed the draft New Finance Documents (appended to the ES) were in agreed form before they were made available to the Creditors on 17 June 2025. The Company will seek re-confirmation in respect of the final versions of these documents prior to RED. The Shareholder Loan Amendment Agreement is nearly in agreed form and will be signed shortly. The New Security Documents do not in fact contain any condition precedent. As to the cash payments which the Company is required to make by RED or within 6 months thereafter, the Company intends to fund these payments from the cash and uncollected sale proceeds from 10 real estate development projects. The Group already has US$19 million in cash onshore and an additional US$10 million will be collected after the sanction hearing. The Group made further communications on 11 July 2025 with the Guangdong bureau of the State Administration of Foreign Exchange (“SAFE”) and was given to understand that once NDRC’s approval is obtained, application can be made to SAFE for approval of remitting these funds to meet these offshore payments. C4. International dimensions and effectiveness The Company is incorporated in the Cayman Islands. To justify the court exercising its jurisdiction to sanction a scheme in respect of a foreign company, it is necessary to demonstrate a sufficient connection between the Scheme and Hong Kong (Re Kaisa, §47). The jurisdiction requirement is satisfied given that (1) the Company’s shares are listed on SEHK; (2) it has since 2008 been registered as a non-Hong Kong company; (3) it has a principal place of business in Hong Kong; (4) it maintains bank accounts in Hong Kong; (5) 3 out of the 6 Existing Subsidiary Obligors are Hong Kong companies; (6) the Existing Loan is governed by Hong Kong Law, and some of the lenders within the syndicated are commercial banks or financial institutions in Hong Kong; and (7) some members of AHG are managed by general partners based in Hong Kong. As regards the utility issue (Re Kaisa §50), the Scheme will achieve a substantial effect given that (1) the Existing Loan is governed by Hong Kong law, and (2) 93.91% in value of the beneficial holders of the Existing Notes (governed by New York law) voted at the Scheme Meeting and, therefore, have submitted to the jurisdiction of the court. That being the position, the Scheme operates as an effective discharge of ~92.59% of the Existing Debts. (Linda Chan) Judge of the Court of First Instance High Court Ms Sara Tong SC leading Mr Danny Tang, instructed by Sidley Austin, for the Company