China Natural Gas creditors ask court to deny exclusivity extension

By Kali Hays

New York, April 3 - China Natural Gas, Inc. petitioning creditor Abax Lotus Ltd. and Abax Nai Xin A Ltd. objected to the company's third request for an extension of its exclusive plan of reorganization filing and acceptance periods, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Abax, which also objected to the company's second exclusivity extension, said that the company has yet to complete the "modest milestones" that were expected as a result of the extension, including fully marketed assets for sale with an identified lead bidder and a complete data room.

"Unfortunately, the debtor has (again) wasted its extension and failed to accomplish any of its stated goals. With at least three potential investors having executed non-disclosure agreements over a month ago, management's inability to accomplish even the simplest of administrative tasks is discouraging would be participants and chilling the sale process before it even commences," the filing stated.

As previously reported, the company asked to extend its filing period through June 9 from April 7 and its acceptance period through Aug. 9 from June 11 claiming it needs the extra time to "negotiate, document and file any acceptable transaction," according to the motion.

Abax asked that the court deny the request for a third extension claiming that the management of China Natural Gas is not proceeding in good faith and is "content to continue stonewalling the Abax petitioners and the other stakeholders in hopes that Abax petitioners will succumb and accept less value than they are entitled to."

A hearing is scheduled for April 10.

Based in Xi'an, China, China Natural Gas is a provider of pipeline natural gas for industrial, commercial and residential use and compressed natural gas for vehicular fuel. The Chapter 11 case was filed on Feb. 8, 2013 under case number 13-10419.

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