The number of mandates awarded to insolvency professionals across Asia Pacific (ex-Japan) jumped in 2Q24 compared to the previous quarter, thanks in large part to a surge in mandates from Indonesian situations.

A total of 64 mandates were awarded in the region in 2Q24 compared with 53 in 1Q24 and 75 in 2Q23. The advisory roles awarded in 2Q24 were related to 31 companies involving a total of USD 53.8bn debt, down from USD 85.8bn in 1Q24 but up from USD 50.9bn in 2Q23.

The sharp QoQ decline in the amount of debt advised on in 2Q24 is due mostly to the previous quarter’s numbers being inflated by the USD 38.9bn debt on China Evergrande Group, which was ordered into liquidation on 29 January this year.

The 2Q24 numbers bring the total number of mandates awarded in the first half of 2024 to 117 roles across 52 companies involving an aggregate USD 116.7bn debt. By comparison, there were 113 mandates involving USD 66.9bn debt in 1H23.

Uptick in Indonesia

Of the 64 mandates in 2Q24, Indonesia accounted for 26, or 40.6%, a significant increase compared to only five mandates in 1Q24. Indeed, the number of Indonesia-related mandates in 2Q24 exceeded all of the roles handed out in either 2023 and 2022, totalling 17 and 21 engagements, respectively.

The number of mandates from Indonesia was second only to China, which accounted for 28 mandates in the quarter.

However, the 28 Chinese mandates were for situations involving an aggregate USD 48.8bn in debt, far surpassing the USD 1.6bn in debt arising from the 26 Indonesian mandates in 2Q24.

The largest Indonesian situation during 2Q24 was property developer and hospital conglomerate Lippo Karawaci (LPKR), which launched a distressed tender offer for its USD 432m bonds in May. In contrast, there were nine Chinese situations that had larger mandated debt amounts than LPKR.

For 1H24, the number of China-related mandates totalled 60 on an aggregate debt of USD 107.9bn. The second-largest number of mandates recorded in 1H24 was for Indonesia-related situations with a total of 31 roles on USD 1.6bn of debt.

Chinese real estate

In 2Q24, Chinese real estate companies continued to be the main source of work for insolvency professionals, as has been the case since 2022.

A total of 20 mandates arose from Chinese real estate situations in 2Q24, accounting for nearly one-third of all the advisory roles across APAC (ex-Japan). The USD 47.8bn aggregate debt related to the 20 mandates represented 88.8% of the total debt advised on during the quarter.

The 20 mandates arose from situations involving 10 Chinese real estate companies. Of the 10, eight were for mandates on debt of between USD 17bn (Country Garden Holdings) and USD 1.3bn (China South City Holdings) – among the 10 largest situations recorded in 2Q24 (See table above). But six of those eight were legacy situations (i.e., in which advisors had been appointed prior to 1Q24.) and only two were new: Agile Group Holdings and Road King Infrastructure.

Agile Group announced on 7 June that it had engaged Alvarez & Marsal as its financial advisor and Sidley Austin as its counsel to explore a holistic restructuring of its offshore debt totalling USD 4bn.

Road King on 11 June announced that JPMorgan had been appointed as the dealer manager for its discounted tender offer and a concurrent term-out consent solicitation for its USD 2bn bonds across five tranches and for an extension of the first reset date of its 7.75% perpetual securities. Reed Smith was the Hong Kong-listed property developer and toll-road operator’s legal advisor for the deal, and Linklaters was JPMorgan’s counsel. Road King announced on 3 July it had received the requisite holder support for the deal, and on 16 July announced it had completed the settlement for the transaction.

New/Legacy situations

Mandates relating to Agile Group’s holistic restructuring of its offshore debt and Road King’s tender offer and consent solicitation for its five USD bonds were the only new situations in 2Q24 that involved debt in excess of USD 1bn.

The four other new situations were for the liability management exercises of both Indonesia’s Lippo Karawaci and Lippo Mall Indonesia Retail Trust, while the mandate related to Galena Mining- and Toho Zinc-owned Abra Mining was related to the Australian lead-silver miner’s entry into voluntary administration in April; and the mandate related to PF Group Holdings arose from secured creditor Brookfield Special Investments pushing the Australian debt collection and purchasing group into administration.

Of the 25 legacy situations in which new mandates were awarded in 2Q24, five – all Chinese real estate developers – involved debt of more than USD 2bn debt each: 1) Country Garden; 2) Jinke Property Group; 3) Yuzhou Group Holdings; 4) Jiayuan International Group; and 5) Dexin China Holdings.

Top advisors 

Linklaters won the most mandates of any law firm in 2Q24, with four mandates involving USD 20.4bn of debt. Of these, three were related to the holistic restructuring of the offshore debt of real estate developers China South City and Country Garden and for Chinese oilfield services and drilling equipment provider Hilong Holding. Linklater’s fourth role was advising JPMorgan in relation to the bank’s mandate as deal manager in June for Road King’s tender offer and consent solicitation for its five USD bonds.

FTI Consulting and CIMB Bank topped the financial-advisor rankings in 2Q24, winning three mandates each.

In FTI’s case, its three 2Q24 mandates were related to its role as receiver over Quintis Australia and advising a group of HSBC-led banks on China SCE Group Holdings’ restructuring and, separately, providing a liquidation analysis report to Yuzhou Group Holdings for its parallel schemes of arrangement in Cayman Islands and Hong Kong.

CIMB’s mandates arise from its role as one of the four deal managers for Lippo Mall Indonesia Retail Trust’s exchange offer in May for its due-June 2024 bonds and one of the three deal managers in June for LMIRT’s exchange offer for its due-9 February 2026s. CIMB was also one of the three deal managers for Lippo Karawaci’s tender offer and consent solicitation in May for its due-January 2025s and due-October 2026s.

By amount of debt, BDO ranked first, advising on USD 9.7bn debt thanks to its role as Jinke Property’s administrator in its PRC bankruptcy process.