Sunac China Seeks $9.55 billion Debt-for-Equity Swap as Liquidation Deadline Looms
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Sunac China Holding Ltd. unveiled its final offshore debt restructuring plan late on Thursday, aiming to convert approximately $9.55 billion in offshore debt entirely into equity — only 10 days before its scheduled liquidation hearing.
Under the new proposal, the troubled property developer plans to issue two categories of mandatory convertible bonds to overseas creditors. The first carries a conversion price of HK$6.80 ($0.87) per share and can be converted immediately after the restructuring takes effect. The second, capped at 25% of total outstanding debt, has a lower conversion price of HK$3.85 per share but is convertible only between the 18th and 30th months after the restructuring.
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- Sunac China Holding Ltd. proposed converting $9.55 billion of offshore debt into equity, issuing two types of mandatory convertible bonds with significant premiums over its current share price.
- The restructuring includes a shareholder stability plan and employee retention initiative, aiming to stabilize operations and reduce debt by approximately 70 billion yuan if successful.
- Sunac faced severe liquidity issues due to China's real estate downturn, with liabilities totaling nearly 260 billion yuan and ongoing liquidation risks despite prior domestic and offshore restructuring efforts.
- Sunac China Holding Ltd.
- Sunac China Holding Ltd., a major Chinese property developer, is implementing a final offshore debt restructuring plan to convert $9.55 billion debt into equity. The plan involves issuing convertible bonds with conversion price premiums and includes shareholder and employee stability initiatives. Amid China's real estate downturn, Sunac faces significant financial challenges, including high liabilities and overdue debts but aims to reduce its total debt significantly. Its liquidity remains strained, with a liquidation hearing pending in Hong Kong.
- China Evergrande Group
- The article mentions that after China Evergrande Group's financial troubles surfaced in 2021, Sunac China Holding Ltd. rose to third place in nationwide property sales rankings.
- China Cinda Asset Management
- China Cinda Asset Management is a financial firm that initiated liquidation proceedings against Sunac China in Hong Kong’s High Court. These proceedings were postponed to April 28, 2024, requiring Sunac to demonstrate solvency to avoid compulsory liquidation.
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