19 December 2023

Kwok Yih & Chan is pleased to have advised Guangdong Adway Construction (Group) Holdings Company Limited on the resumption of trading in its H shares on the Main Board of The Stock Exchange of Hong Kong Limited.

Guangdong Adway is principally engaged in the provision of interior and exterior building decoration and design services in the PRC. It is a joint stock company incorporated in the PRC with its H shares listed on the Main Board of the Stock Exchange. Trading in its H shares on the Main Board had been suspended on 1 April 2022 as there was a delay in publication of its FY2021 annual results. Trading continued to be suspended following the publication of the FY2021 annual results as Guangdong Adway was requested to address the issues giving rise to the disclaimer of opinion on the FY2021 annual results relating to its account receivables, prepayments and contract assets, as well as the material uncertainties on going concern. It was also requested to demonstrate its compliance with Rule 13.24 of the Listing Rules as creditors have filed bankruptcy restructuring petition against it in the PRC.

A resumption plan was devised for Guangdong Adway to conduct a debt restructuring in the PRC; together with the issuance of new domestic shares and new H shares to certain subscribers and placees. Via these restructuring transactions, it is expected that the indebtedness of Guangdong Adway would be reduced, and its financial position be improved. The restructuring transactions are subject to sanction by the PRC court and approval from the creditors and the shareholders; and are expected to be completed in or around the second or third quarter of 2024. The business of Guangdong Adway is continuing as usual in all material respects in the meantime.

Following a 20-month long suspension, Guangdong Adway has remedied the issues causing its trading suspension and demonstrated to the Stock Exchange’s satisfaction that it has fully complied with the Listing Rules. Trading in the H shares of Guangdong Adway on the Main Board resumed on 27 November 2023.

The team was led by Conrad Chan and Jenny Ng, who are the firm’s capital markets & corporate finance partners; and they were supported by Edki Sek. Amasse Capital and Sheng Yuan are the joint financial advisers to Guangdong Adway.