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Chinese property developer is seeking to restructure nine publicly traded bonds valued at approximately CNY13.9 billion (around USD2 billion), with plans to extend repayment terms over the next decade through 2035.
Originally due between 2023 and 2026, these bonds would now be repaid in nine semi-annual installments starting from September 2031 and concluding in September 2035, according to recent reports citing the company’s restructuring plan.
The company’s financial struggles became evident in 2023 when it defaulted on offshore debt amidst a broad downturn in the property sector.
The proposed repayment schedule begins with four smaller installments — 1%, 2%, 3%, and 4% of the principal — followed by larger payments of 15%, 15%, 20%, and 30%, leading to full repayment in 2035. The interest rate is fixed at a simple annual rate of 1% and will be paid in full on September 2, 2035.
Creditors agreeing to these terms also need to consent to changes in credit enhancement measures, such as releasing certain guarantees.
Additionally, the company has introduced other restructuring alternatives, including a cash buyback, an equity swap, and a broader creditor arrangement. Under the buyback plan, up to CNY450 million (about USD63.3 million) of bonds could be repurchased at 12% of their face value on a pro-rata basis.
For the equity swap, the developer would issue a specified number of ordinary shares to a special purpose trust in Hong Kong, valued at HKD2.6 (roughly USD0.33) per share. These shares would be gradually sold within 24 months, with the proceeds used to repay creditors in yuan equivalent to their bond holdings. Creditors will receive cash and will not own the new shares directly.
Another option permits creditors to convert their bond holdings into general non-bond claims, with repayment deferred until 2033 and interest fixed at 1% annually.
To encourage support for the restructuring plan, the company is offering a consent fee. Creditors who vote in favor of all resolutions at the bondholders’ meeting will receive an early repayment equal to 0.1% of their bond holdings, which will then be canceled.
Following the announcement, shares of the company increased by 1.6%, reaching HKD0.63.
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