Tianjin-based Sunac – once seen as one of China’s strongest private property developers before a weakened economy and tighter liquidity conditions left it and other companies in the sector exposed to high levels of debt – said on Friday morning fair (9) by Chinese time, which made “significant progress in formulating a structural restructuring plan” with offshore creditors.
Sunac, which defaulted on a US dollar-denominated bond in May, outlined a framework that included a deleveraging plan to convert between $3 billion and $4 billion of existing debt into common stock. Other debt will also be exchanged for newly issued dollar public notes with maturities of two to eight years, the company said.
The developer added that the principal amount of its offshore interest-bearing debt was $11 billion at the end of June, little changed from late-2021 levels. on time.
The draft plan shows that “offshore investors are now willing to accept debt extension and new notes to replace the old notes, even for this type of high-risk, highly leveraged developer,” said an analyst at a Chinese investment bank. .
He added that “the risk of bankruptcy or the liquidity problem will disappear very, very soon” and that the real estate sector “still needs to reassess a lot even after the last recovery”.
The China Evergrande Group, the most indebted property developer in the world, is also working on a debt restructuring plan that it aims to complete by the end of the year.
The news of progress in Sunac’s debt restructuring boosted shares of the sector in Hong Kong, whose Hang Seng index stood out among the gains of Asian stocks today.
Source: CNN Brasil
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