(Bloomberg) -- Times China Holdings Ltd. said it has reached an agreement in principle with a group of key creditors, ahead of the first court hearing in proceedings that could lead to the defaulted builder’s liquidation.  

The Guangdong-based developer said in a Friday night exchange filing the “significant milestone” involves an ad-hoc group of offshore creditors that holds or controls more than 25% of the principal of six dollar bonds. The agreement in principle involves “high-level, key commercial terms of a holistic proposal,” though negotiations continue on definitive terms of a debt-restructuring proposal.

Bloomberg News reported earlier Friday that Times China was accelerating debt-restructuring talks, citing people familiar with the matter. 

The builder started to communicate with its major creditors, including banks and bondholders, almost on a daily basis after receiving a liquidation petition in April, said the people, who asked not to be identified as the matter is private. That followed slower initial progress after a financial adviser for Times China had come up with a rough plan months ago, according to the people.

The first hearing regarding the so-called winding-up petition is set for July 3 in Hong Kong. 

The Times China case is one of the latest examples of offshore creditors turning to Hong Kong courts to push beleaguered Chinese developers back to the negotiating table. More than 20 Chinese property firms have received winding-up petitions the past few years, according to Bloomberg-compiled data, including Sino-Ocean Group Holding Ltd. earlier this month. 

Times China had total assets of 121 billion yuan ($16.7 billion) as of the end of 2023. About 15 months after the firm halted offshore debt payments, Hong Kong-based lender Hang Seng Bank Ltd. filed a winding-up petition against it. 

In prior winding-up hearings, showing progress on debt talks has been an important factor in having cases adjourned or even dismissed. 

Times China’s offshore notes trade at around 2 cents on the dollar, Bloomberg-compiled data show, indicating extremely low recovery expectations among investors.

--With assistance from Jill R. Shah.

(Updates first two paragraphs with agreement in principle.)

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