SHANGHAI China Huishan Dairy Holdings, the Hong Kong-listed firm targeted by short sellers, including Muddy Waters Capital, is preparing for provisional liquidation in a move that could protect its assets as it negotiates with creditors.
The firm had told its Cayman legal advisers to make the preparations, it said in a Hong Kong stock exchange filing on Thursday. Huishan’s board earlier found that the net liabilities of its units in China “could have been” 10.5 billion yuan (S$2.2 billion) as of March 31, the company said. A provisional liquidation generally is used to safeguard a company’s assets before a court rules what action to take.
Huishan’s shares have been suspended since they tumbled 85 per cent on March 24, the day…
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