Campbells advises the Joint Liquidators of Tsinghua UNIC on landmark US$2 billion cross-border bond restructuring, delivering bondholders up to 94% recovery

Background to the restructuring

Tsinghua UNIC (a British Virgin Islands special purpose vehicle) issued three series of guaranteed bonds: US$1,050,000,000 4.75 per cent bonds due 2021, US$750,000,000 5.375 per cent bonds due 2023, and US$200,000,000 6.50 per cent bonds due 2028, each unconditionally and irrevocably guaranteed by its PRC incorporated parent, Tsinghua Unigroup Co., Ltd. (“TUC“). Trading in the bonds was suspended in November 2020 after TUC ran into liquidity problems, and TUC itself entered PRC reorganization proceedings in Beijing shortly afterwards, with a reorganization plan sanctioned by the Beijing court in January 2022.

Tsinghua UNIC was placed into liquidation in the BVI in March 2023, on the application of the Trustee of the guaranteed bonds, with Edward Middleton, Tiffany Wong and Wesley Edwards of Alvarez & Marsal appointed as Joint Liquidators.

Scheme of arrangement

At the request of TUC, the Joint Liquidators proposed a Scheme of Arrangement under section 179A of the BVI Business Companies Act, 2004, offering Scheme Creditors a base cash recovery of 92% of outstanding bond principal, with Eligible Consenting Creditors also receiving a 2% Consent Fee, together delivering a blended cash recovery of 94%, paid in exchange for the release of all claims against Tsinghua UNIC and TUC. The scheme offered Scheme Creditors an immediate cash recovery in place of continuing to await deferred, RMB-denominated payments from TUC over a further four-year period under the PRC reorganization plan. It is notable that the Scheme was brought at the request of TUC by the Joint Liquidators of an insolvent company already in liquidation, rather than being used (as is more typical) to restructure an insolvent company’s balance sheet in order to avoid liquidation.

A total of 469 Scheme Creditors participated in the Scheme Meeting. All of those Scheme Creditors voted in favor of the Scheme, representing 100 per cent. in number and 100 per cent. in value of the Scheme Claims present and voting at the Scheme Meeting.

Restructuring effective date

On 30 July 2026, Tsinghua UNIC (acting by the Joint Liquidators) announced that all restructuring conditions had been satisfied or waived and that the Restructuring Effective Date had occurred. In aggregate, approximately US$875.9 million — comprising US$856.6 million in restructuring consideration, US$17.3 million in consent fees and US$2.0 million in retained amounts across the 2021, 2023 and 2028 bonds — was paid and distributed to Scheme Creditors and Eligible Consenting Creditors. Following the Restructuring Effective Date, all claims of Scheme Creditors against Tsinghua UNIC and TUC in connection with the guaranteed bonds were released and discharged in full, and each series of guaranteed bonds was cancelled.

Having discharged the Company’s obligations under the guaranteed bonds (including through funding the Restructuring Consideration), TUC now steps into the shoes of the Trustee and the holders of the guaranteed bonds by way of a subrogated claim in respect of the liquidation of Tsinghua UNIC.

The team

The Campbells team advising the Joint Liquidators was led by Hong Kong based partner, Jane Hale, with support from Kay Cheng and Milton Chan in the firm’s Hong Kong office, and with support from Grant Carroll, Dan Griffin and Emily Clegg in the firm’s BVI office. The Joint Liquidators, Edward Middleton, Tiffany Wong and Wesley Edwards of Alvarez & Marsal, together with Edward Lee of the Alvarez & Marsal team, were also advised by White & Case as global counsel, whose team was led by partner Sophie Lyall, with support from Anthony Chan and Yesheng Li.

The outcome reflects over three years of sustained work by all parties involved since Tsinghua UNIC was placed into liquidation in March 2023, and demonstrates how liquidators of BVI companies can use the scheme of arrangement jurisdiction creatively to deliver value for creditors in complex, cross-border restructurings.