The developer reached an agreement with a group of offshore creditors in March to restructure $9 billion of its debt, under which a part of its debt would be exchanged into convertible bonds backed by its Hong Kong-listed shares along with new notes with maturities of between two and nine years.
Sunac said in an earlier filing the plan had won support from holders of 87% of outstanding offshore debt by July, but Monday’s announcement marks the plan’s formal final approval.
In a separate filing on Monday, Sunac said it had decided to raise the cap on mandatory convertible bonds to $2.75 billion, up from $2.2 billion in the original plan, to cater to “an overwhelming interest” by the scheme creditors.
Sunac’s revenue in the first six months rose 20.5% to 58.47 billion yuan ($8.02 billion), its interim results showed. Losses declined 18.1% to 15.37 billion yuan.
China has rolled out support measures to help revive the property sector, which accounts for roughly a quarter of its economy and has faced a liquidity crunch since 2021, but analysts say more is needed to help it recover.
Unlike Sunac, many fellow developers have yet to reach agreements with offshore creditors.
Embattled Chinese property developer Country Garden, one of the few large Chinese developers that have not defaulted on debt obligations, faces yet another liquidity test on Monday when $15 million interest payment linked to an offshore bond is due after having dodged default at the last minute twice earlier this month.
Sunac said last month it believed a successful offshore debt restructuring would greatly reduce cash flow pressure over the next two years, though “material uncertainties” existed regarding whether it could be able to implement steps to restore cash flow.
Sunac’s Hong Kong shares have fallen 38.9% so far this year.
Reuters