Court set to rubber stamp controversial Asia Aluminum asset sale

A Hong Kong court is today expected to give the go-ahead to a controversial Chinese-led offer to acquire Asia Aluminum, a high-profile mainland company placed in provisional liquidation this year after foreign investors spurned a $1.2bn debt restructuring.

Ferrier Hodgson, the provisional liquidator, has scheduled a court hearing to seek approval for the sale of three key units of Asia Aluminum to a management-backed consortium called Golden Concord Pacific, for about $500m including debt.

Barring any unexpected developments, an endorsement is considered a formality and will trigger a 30-day process to transfer the company's assets.

"I believe that there is every reason that this offer will proceed," said Rod Sutton, executive director of Ferrier Hodgson, which was appointed in March.

Mr Sutton was left with a single rescue plan to present to the court after Norsk Hydro, the Norwegian aluminium company, this week withdrew its last-ditch approach to acquire Asia Aluminum after its overtures met with a frosty response.

Norsk had approached the Zhaoqing municipal government, the southern Chinese city where Asia Aluminum is based.

People familiar with the matter said Norsk was not prepared to fight an uphill political battle, given hostile noises towards its foreign investment and Chinese wishes that the restructuring process should not be delayed.

"Norsk is a serious global company with a large balance sheet but it was clear that the local government officials did not want to discuss an alternative rescue plan with them," one person familiar with the matter said.

Chinese lenders, suppliers and government officials involved in the Golden Concord Pacific offer had warned that it could effectively lapse after June 30.

Norsk's intervention threw a potential lifeline to offshore investors lobbying against a restructuring plan that will in effect wipe out their holdings.

The future of Asia Aluminum, a top three global producer of aluminium extrusion products, has been watched closely in debt markets as an important guide to investor rights, as mainland Chinese companies scramble to restructure their finances in the downturn.

The company angered investors in February when it launched a tender offer for its outstanding international bonds at less than 30 per cent of face value, blaming falling earnings and a rising debt burden.

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