Hong Kong Pharmaceutical Holdings
Hong Kong Pharmaceutical Holdings is a publicly listed company on the Hong Kong Stock Exchange ("HKEX"), which includes non-integrated businesses comprised of retailers and wholesalers of Traditional Chinese Medicine in Hong Kong, pharmacies in China and biotechnology manufacturers in China. After group liabilities accumulated to US $30 million, with creditors and shareholders facing total losses, the company appointed Alvarez & Marsal Asia as provisional liquidators to implement a restructuring of the company to maximize recovery to creditors.
The Alvarez & Marsal team acted quickly to develop and implement a restructuring plan that aimed to restructure debt, eliminate losses, carve out loss-making China businesses and inject fresh capital. A&M ultimately prepared a viable proposal for the resumption of trade in order to preserve the company's listing status and achieve listing premium not otherwise available in liquidation. The Traditional Chinese Medicine business returned to profitability within six months. In another notable outcome, investors provided US $1 million in funding for working capital during the provisional liquidation, enabling the company to double sales during the Chinese New Year Season. Creditors can now expect a return of approximately 40 cents, compared to a total loss in liquidation; shares resumed trading in December 2006, restoring more than HK $2 billion in shareholder value.
