Muddy Waters Target Huishan Dairy Preps Provisional Liquidation
- Huishan Dairy cited liabilities in China of $1.6 billion
- Carson Block said last year firm worth ‘close to zero’
Bags of Huishan milk at a grocery store in Shenyang.
Photographer: Chinatopix via AP Photo
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China Huishan Dairy Holdings Co., the Hong Kong-listed company targeted by short sellers including Muddy Waters Capital LLC, 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 Thursday. Huishan’s board earlier found that the net liabilities of its units in China “could have been” 10.5 billion yuan ($1.58 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.