Struggling property developer Sunac China said on Tuesday it had reached an agreement with a group of foreign creditors to restructure $9 billion of its debt.
Sunac, one of China’s biggest real estate developers, was among many companies that defaulted last year as the sector was in the grip of a debt crisis.
China Evergrande Group, the world’s most indebted property developer, last week announced plans to restructure $22.7 billion in offshore debt, which might set a pattern for struggling rivals and sway investor sentiment. with regard to the country’s ailing real estate sector.
Beijing-headquartered Sunac said some of the debt would be swapped for convertible bonds backed by its Hong Kong-listed shares, as well as new bonds with maturities between two and nine years and bearing interest rates between 5% and 6.5%.
Sunac has indicated that it would have the option of extending the maturity of the first two tranches (new bonds with a duration of two and three years) by one year.
Creditors can also choose to convert part of the debt into another convertible bond with a lower conversion price, or into shares of its property management unit, Sunac Services.
A consent fee of 0.1% of the debt amount will be paid to creditors who agree by April 20, and the restructuring is expected to take effect on September 30.
The property developer said its shares, which have not traded since April 1, 2022 pending the publication of 2021 financial reports, will remain suspended.
Earlier this year, Sunac extended the maturity of its 16 billion yuan ($2.33 billion) of onshore bonds by an average of 3.5 years.
($1 = 6.8761 Chinese yuan renminbi)
