Financial Services Bureau: The current statutory mechanism for debt restructuring reduces the risk of forced liquidation for enterprises

The government planned to legislate the establishment of a statutory corporate rescue procedure in 2020, but has yet to submit the relevant bill to the Legislative Council. Acting Secretary for Financial Services and the Treasury, Chen Haolian, stated that the Financial Services and the Treasury Bureau and the Official Receiver's Office have conducted multiple consultations on the statutory corporate rescue procedure, but many legislators and key stakeholders expressed opposition and strong reservations about the proposal. Therefore, after considering the opinions of various stakeholders on the statutory corporate rescue procedure, the government will maintain the current market-led Scheme of Arrangement as the statutory mechanism for debt restructuring.

He mentioned that the market has been effectively utilizing the Scheme of Arrangement provided under the Companies Ordinance (Cap. 622) to successfully assist multiple enterprises in achieving debt restructuring. In the past five years, over 40 court-approved Scheme of Arrangement orders have been used for debt restructuring, covering industries such as aviation, mining, and real estate.

He further stated that the current Scheme of Arrangement, under court supervision, effectively supports viable enterprises in debt restructuring and reduces the risk of forced liquidation. The government will maintain an open attitude and continue to actively collect and assess the opinions of various stakeholders on corporate rescue procedures or other relevant aspects of the existing corporate liquidation system, aiming to make the bankruptcy and restructuring mechanisms more practical and efficient, thereby benefiting all parties in the market