* Huishan announces move to provisional liquidation
* One of the most spectacular collapses of a HK-listed firm
* Fate of restructuring plan not addressed (Adds Deloitte declining to comment, paragraph 11)
SHANGHAI/BEIJING, Nov 17 (Reuters) - China Huishan Dairy Holdings Co Ltd, struggling under billions of dollars worth of debt, is preparing for provisional liquidation in a legal escalation of one of the most spectacular collapses of a Hong Kong-listed firm in recent years.
Shares in the mainland group, once a hot property with investors, have been suspended since they plunged 85 percent without warning in March, after which it revealed missed loan payments and the disappearance of its finance director.
The move comes as creditors in China and offshore jostle for position to get their money back from the firm, whose debts totalled at least 38 billion yuan ($5.73 billion) at the end of July, according to a work-out plan seen by Reuters.
Hong Kong-based restructuring lawyers said the move by Huishan to file for provisional liquidation could actually help give it "breathing room" against creditors and in theory allow it more sway to choose an outside party to take on the role.
"What the firm is doing is taking control of its own destiny by looking to appoint a provisional liquidator at the listed company level and putting their own choice of person in the role," one Hong Kong-based restructuring lawyer said.
"They'll feel they have a little more control over the outcome rather than having someone who comes at it from a creditor's perspective," the person said, asking not to be named because they were involved in similar cases.
Huishan said earlier this month it had come to a agreement with most of its mainland creditors to restructure. The biggest of these include Bank of China Ltd , China Minsheng Banking Corp Ltd and Industrial and Commercial Bank of China Ltd .
Creditors of its Hong Kong-listed unit include a consortium of banks led by HSBC Holdings PLC, China CITIC Bank International Ltd and Hang Seng Bank Ltd, which extended a syndicated loan to the listed vehicle.
The announcement, made late on Thursday, provided no indication as to whether the restructuring plan announced earlier this month would move forward, or whether offshore creditors would cooperate with those efforts.
The situation is being monitored closely by Huishan creditors, especially unsecured creditors that stand to lose the most in a court-ordered sale of company assets.
OFFSHORE VS ONSHORE
Deloitte, which earlier was hired by Huishan as an independent forensic accountant, is the leading candidate to act as provisional liquidator, people familiar with the matter told Reuters, declining to be identified due to the sensitivity of the matter. A Deloitte spokeswoman declined to comment.
Further complicating the situation is a move by Ping An Bank Co Ltd, which claims it is owed 2.4 billion yuan, to institute a separate provisional liquidation of Champ Harvest Ltd, the main vehicle of Huishan's chairman and majority shareholder, Yang Kai.
Champ Harvest is registered in the British Virgin Islands, while the listed unit of Huishan is domiciled in the Cayman Islands where the company is preparing for provisional liquidation.
Ping An Bank did not respond to a request for comment.
Deloitte, in its forensic analysis, estimated that Huishan's total assets at the end of June amounted to 25.9 billion yuan. Most of those assets, Huishan said in its Thursday filing, are held through subsidiaries based in mainland China.
"Any debt restructuring of those assets and liabilities would be subject to PRC law," Huishan said, referring to the People's Republic of China.
Bankers said the latest move could be a headache for offshore creditors.
"You can't rule out that this provisional liquidation is a way of forcing some opposing creditors to accept its debt restructuring plans," said Meng Shen, director of Chanson & Co, a boutique investment bank based in Beijing.
Huishan was billed as the country's biggest integrated dairy firm when it went public in 2013. It raised additional funds after listing by leasing its cows and selling wealth management products through what it called "innovative financing."
Huishan gave little indication of its financial health in Thursday's filing, only that its subsidiaries in China likely had around 10.5 billion yuan in combined net liabilities as of the end of March, without giving further details.
($1 = 6.6332 Chinese yuan renminbi)
(Reporting by Adam Jourdan in SHANGHAI and Matthew Miller in BEIJIJNG; Additional reporting by Twinnie Siu and Umesh Desai in HONG KONG and Shu Zhang in BEIJING; editing by Jennifer Hughes and Jason Neely)